Live data from Hacker News

Germany's days as an industrial superpower are coming to an end

bloomberg.com

51–60 of 157 posts

Re: Germany's days as an industrial superpower are coming to an end

#51

The article lists a lot of things going bad for Germany. But was there some underlying reason? Like demographics, shrinking population? Or is it just the obvious , Russian gas, rising Energy costs, now their prices are too high, so exports are down.

Bad governments that actively hinder progress on many fronts (just look for example at Wissing as a transport minister being completely anti train service, destroying infrastructure for the people, while dancing to the tune of car manufacturers), lining their own pockets, corruption, unfettered lobbyism and bad policies for education system added their weight to this. A country can only take so much incapability and…

Isn't the German policy tracking down NeoNazis on AfD? IIRC there is even a movement on closing down a specific party. I remember hearing a news about it.

Btw I love DW news, such a great channel.

Re: Germany's days as an industrial superpower are coming to an end

#52
I've lived in Berlin for fifteen years now. My view is very different from what this article is portraying. Germany definitely has issues. Some of them are short term issues. Some of them self inflicted. And others have been issues for a long time. But all of these are fixable. All it takes is change.

Change is hard for Germans but if you look at their history, you see that that wasn't always the case. They are hard workers and they have a culture of just getting shit done and being very proud of their ability to do so. This is part of their culture and value system.

The wave of conservatism that has crippled the country for decades is being challenged by a younger generation that is starting to take over from the baby boom generation that is the root of this problem. They inherited a booming economy and have been reluctant to change because they never had to. And now they are old and incapable of change, like most old people.

But that generation is on the way out. Most people that were employed before the cold war ended are now closing in on retirement age. Another ten years and the working force will consist exclusively of people that are used to using computers, never knew a Germany that wasn't united, and have modern ideas about how to run a company. Or indeed the country.

Germany has three challenges:

1) Infrastructure is a disgraceful mess and it needs fixing. Roads, rails, and energy sector. All of it.

2) There's an energy crisis that was caused by the Russians. Which is accelerating the trends that are causing the next challenge.

3) There's a lot of old industry that is becoming less relevant. Coal, steel, ICE cars, etc.

The fix for each of these challenges is addressing the first challenge. Doing so will fix all their issues and create a lot of jobs and economic opportunities. And unlike the US and China, Germany is not crippled by debt. They've been frugal and reluctant to spend. That's actually the main reason the infrastructure is a mess. But their credit rating is awesome. They are a bit slow and indecisive right now but with the right leadership, they can make a lot of changes in a short amount of time.

My prediction is that they will have largely cleaned up the energy sector by 2035-2040 at great cost. This is a good thing. All of that spending will flow directly into their economy. Spending lots of money is a great way to jump start an economy.

As a result, they will no longer be dependent on fossil fuel. This will really suck for economies whose main business is exporting that stuff. Related industries will have largely adapted or died off by then. Steel production will move to places where renewable energy is cheap and plentiful (i.e. not Germany). Part of the car industry will be sold off to the Chinese and the rest will have transitioned to battery electrical. This will be very tough for Germany but there's very little they can do to stop this at this point. The same conservatism that cripples their country is also in charge of these industries.

However, once the new energy sector start booming, there will be a lot of re-shoring of manufacturing that is currently happening in China. Formerly labor intensive production processes will transition to high tech and largely automated processes. Germany does high tech stuff extremely well. Both the Americans and the Chinese build EVs using equipment that is made in Germany. You look around in a Tesla factory and they have all the best stuff. Made in Germany. The key insight here is that Germany already makes all the things that they need for re-shoring manufacturing. Chips, machines that make chips, tools, machines, etc.

In short, they have the means and the money to do what needs doing, which is fixing their infrastructure. All they need to do is start doing that.

The key blocker for that is their bureaucracy. They are hopeless paper and process fetishists and stuck in their old ways. I often make fun of my German friends over this and they all are a bit ashamed and embarrassed about this. They are well aware and the next generation of politicians is going to have to do things differently in order to get the confidence of voters. Which is why they are all trying to outdo each other with plans on just how to do this.

Re: Germany's days as an industrial superpower are coming to an end

#53

Earlier quoted context omitted.

Demographics. The Baby Boomers have started to retire. Population is aging, birth rates are low, labor pool is shrinking.

But why would people retiring cause plants to close. The article talks about layoffs. But if they are having layoffs, and people can't find work, that would indicate they do have workers, not a shortage of workers.

Not just about the raw number of people. When your hear "the population is aging," it means the median age is increasing over time. It puts a lot of strain on an economy when the ratio of retirees to working age people gets too high. Retirees are expensive.

Re: Germany's days as an industrial superpower are coming to an end

#54
post #28

Earlier quoted context omitted.

Demographics is the big one. Obviously fewer workers and more retirees, but also a gerontocracy where many parties primarily want to go back to some idealised version of the past. The CDU is basically the party of 1960s car adverts. The Greens are hippies, recent management notwithstanding. The SPD has an identity crisis, but before that was classic cold-war social democrats. The Left is fortunately going extinct, bu…

Demographics aren't the issue. Japan has had relatively bad aging, per capita growth for working-age population since 1990 is equal to the US. Indeed, the issue of demographics has been a massive problem because politicians repeat the mantra: population cannot age, we must mass import. Okay...but most high productivity people aren't going to Germany (and to be clear, this has been the case in France, the UK, many oth…

Is Japan actually in a better place? GDP per capita is worse, work hours are longer, debt is much higher, birth rates are lower. Citation needed.

Re: Germany's days as an industrial superpower are coming to an end

#55
post #44

Shutting down nuclear plants surely couldn't have helped.

The last new nuclear plant to go online in Germany was Greifswald 5 in November 1989. For 23 days.

Given the massive failure of AVR Jülich, whose design was supposed to be "fail safe" while it's now the most 90Sr-contaminated nuclear facility world-wide, and the corruption around it, there's little trust that even if the technology is safe, operations would be.

That accident in Jülich was 1979, rumors that something happened were struck down with political support, and so the acknowledgement by the operator was 21 years later in 2000 and the government confirmed it only in 2010. The plan for decommissioning is to get it done by the end of this century, after we "develop some procedure during the next 60 years." (that is, we have no f'ing clue what to do with that thing right now). By that time, the incident has been 120 years ago...

https://en.wikipedia.org/wiki/AVR_reactor (and even more so its German equivalent page) has the gory details of that mess. Germany likes to do things at industrial scale, and so it also messes up at industrial scale.

As a result (and while Chornobyl didn't help the nuclear-power cause, the German anti-nuclear-power movement predates that incident by ~10 years), Germany moving away from nuclear power has been a long time coming.

Re: Germany's days as an industrial superpower are coming to an end

#56

I've lived in Berlin for fifteen years now. My view is very different from what this article is portraying. Germany definitely has issues. Some of them are short term issues. Some of them self inflicted. And others have been issues for a long time. But all of these are fixable. All it takes is change. Change is hard for Germans but if you look at their history, you see that that wasn't always the case. They are hard…

So the green bright future is in 10 years and it will take a lot of hard work to get there?

If that's the path to success, AfD will be at 50% within 2 years.

Re: Germany's days as an industrial superpower are coming to an end

#57

Germany's strategy has been to offer higher quality products at a huge markup. Just using the auto industry as an example, in the past twenty years the difference in quality between a mass market vehicle and a luxury vehicle has compressed. Competing on quality seems to be getting harder. The Anglophone economies, whose shift to services away from manufacturing has been ballyhooed and decried in many quarters, embrac…

Disclaimer: I don't know shit, about anything.

> The Anglophone strategy led to greater internal inequality but seems to be better from an aggregate standpoint.

Let's see. I feel like whatever is brewing economically and socially may hurt the "service industry backed societies" harder, when the time has come.

> Germany still has an enviable roster of small, agile manufacturers, and the Bundesbank and others reject the notion that full-blown deindustrialization is anywhere close.

It's not all cars. It's a lot of things you haven't heard about, because they are highly specialized, niche industrial parts. I think, the German economy rests on the shoulders of Maschinenbau and, presumably, there is a whole lot less naked growth enabled "bullshit" products in that space.

Don't lie, don't you feel something is freaky with the economy? I don't just mean numbers and stock value... something more fundamental. Don't you feel overwhelmed by commerce, at times? Like, there is a lot of non-products produced. Almost violently pushed onto people, sickening amounts of "stuff" saturating all channels. How many mouths does marketing feed? There is so, so much marketing. Can this really be sustainable???

I don't know. I feel something is getting horribly out of balance and the service industry is a symptom. Rabid inequality is a symptom. Like core rot, it looks fine, until a little gust lays the tree onto your house.

Re: Germany's days as an industrial superpower are coming to an end

#58

I've lived in Berlin for fifteen years now. My view is very different from what this article is portraying. Germany definitely has issues. Some of them are short term issues. Some of them self inflicted. And others have been issues for a long time. But all of these are fixable. All it takes is change. Change is hard for Germans but if you look at their history, you see that that wasn't always the case. They are hard…

Nice summary, thank you. As a German who has spend significant time in the US, too, I could not put my finger on the missing part within all these pessimistic other comments. But it is there: Germany and the US are still very similar, if you leave some details aside. Just the timing is problematic at the moment. We will see. One big question is whether we can stop the AfD. The next big question is if we can channel all the energy from young people to do the necessary changes that the current old generation couldn't, for various reasons. Don't be blinded: Not just Germany is in a transition phase, the whole world is. One (of many) fragile moment(s) in the history of humans.

Re: Germany's days as an industrial superpower are coming to an end

#59

Earlier quoted context omitted.

I think the problem is that German energy is expensive compared to other countries. On top of that you have regulation and lack of subsidies making other places more attractive to produce in ie. the US, Eastern Europe or China.

Correct. BASF is investing heavily in China. Nothing tells you more about this problem than the most German of companies moving to China. BASF's largest plant in Germany was hooked up directly to Russian gas. Russian gas is now going to China. So are BASF. I don't think regulation or subsidies are to blame either. Eastern Europe is receiving heavy investment because they have costs for workers under control and can p…

Well, considering how great the Russia strategy of the German industry has worked out, I’m looking forward to bailing out basf

Re: Germany's days as an industrial superpower are coming to an end

#60
post #9

Earlier quoted context omitted.

what?

You know, the one where Germany is falling in stature on the international stage so it pulls itself up from it's bootstraps so it can once again rise up to an international superpower. I forget the title. I think they made a sequel.

"The Grand Foray" I believe is what you are thinking.
Post reply on HN