The soaring glass and iron Siemens factory here opened almost exactly a century ago. At first, it churned out electricity turbines, then munitions during World War II before being looted by the Soviets, which required it to be rebuilt at the dawn of the cold war.......A Siemens factory in Berlin for manufacturing turbines. The company spent 500 million euros to develop the new turbines as part of a push into green technology. .........Today, it is manufacturing turbines again — except these models are among the most advanced in the world, each one able to power all the homes in this city of three million.
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The same might be said for much of Europe itself........ in moving to preserve jobs through the worst global downturn since the end of the war, they have forged a different path toward recovery.
They are making old plants more modern and effective rather than watching workers or companies deemed uncompetitive fall by the wayside.
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Americans often assume newer, smaller companies are the engines of innovation and job creation — hence President Obama’s decision to make a $30 billion program to encourage small-business loans a centerpiece of his jobs plan.
Europe, in stark contrast, often relies on its large companies to sustain both employment and a cutting edge in important industries. One crucial tool, along with such measures as work-sharing, is a reliance on environmental innovation.
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Some large companies are surprisingly resilient. The Siemens factory added 500 workers here in the depths of the economic crisis last year, beginning production of new gas-burning turbines that are the most powerful Siemens makes but emit substantially less carbon dioxide than older models.
In Europe, fuel is heavily taxed, and there are substantial subsidies for producing alternative energy. Such incentives serve a dual purpose: supporting employment at green-oriented companies in the short term and, Europeans hope, giving their companies a strategic advantage when the global economy and demand pick up.
At Siemens, for example, with revenue increasing 11 percent from 2008 to 2009, its broad green portfolio is now growing faster than its other businesses, Barbara Kux, the chief sustainability officer at the company, said.
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While unemployment has soared to 20 percent and higher in European countries like Spain and Latvia, the relative success of other European countries in avoiding deep job cuts adds a new wrinkle to a longstanding trans-Atlantic argument.
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Germany’s economy contracted 5 percent last year, yet its unemployment rate of 7.5 percent is actually down from two years ago. By contrast, the economy of the United States shrank 2.4 percent last year as unemployment doubled, to 10 percent, over the period.
The ability of the German economy, the biggest in Europe, to stanch job losses despite a markedly deeper recession than that in the United States is “something of an economic miracle,” Jörg Krämer, chief economist for Commerzbank in Frankfurt, said.
Much of the attention on saving jobs has focused on the government’s short-work program, in which taxpayers and companies share the cost of furloughing workers. But Mr. Kramer said the government-financed program of shorter workweeks was responsible for saving only about 20 percent of jobs.
“Half of this miracle can be explained because
firms allowed workers to do less; they tolerated a 2.5 percent drop in productivity,” he added. “You can either cut workers or cut hours.”
In the more flexible American labor market, where industrial unions are weak and contracts far less rigid, companies responded more often by letting workers go, sharply cutting costs and preserving profit margins.
German companies not only reduced hours on the job, but they also made a decision to accept lower profit margins in the short term, Mr. Kramer said, a practice he called “labor-hoarding.”
....Germany, profit margins have fallen to just 0.58 percent in the latest quarter, from 6.26 percent in the first quarter of 2008, according to Thomson Reuters Datastream. Similarly, French profit margins have dropped to 1.2 percent, from 6.5 percent. By contrast, corporate profitability in the United States has shrunk to 3.6 percent, from 7.8 percent. snip
http://www.nytimes.com/2010/02/04/business/global/04iht-euecon.html?pagewanted=2&sq=germany manufacturing&st=cse&scp=2
thanks to Germany's strong unions and co-determination, etc....
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