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ASK employees at the Bavarian Motor Works in Munich about manufacturing costs, and they become defensive and defiant, though still polite. Siegmund Engel, 35, who puts together 3 -series BMWs, is typical: " People say that costs are too high. It's true that other countries are cheaper. That is bad news for us. But I think our costs here are... " (he pauses) .".. appropriate. " Siegmund says he cannot imagine getting less than the basic pounds 500 a week he now earns.
His opposite numbers at Rover in Longbridge would no doubt be pleased to trade places. Siegmund himself readily admits that BMW, in common with the rest of the German economy, is not run on the cheap. According to BMW, all but a few per cent of its workers earn more than DM 60, 000 (pounds 27, 000) a year - in Longbridge the average is pounds 16, 000. The BMW workers enjoy a holiday entitlement which starts at six weeks a year (five weeks at Longbridge), and goes up from there. Plus there are the standard public holidays, which Catholic Bavaria is especially keen on - 12 or 14 a year depending on how you count them (Britain has eight). Then there is Urlaubsgeld, or "holiday money" - approximately an extra month's pay, towards the summer break in Majorca or Miami.
And Weihnachtsgeld, or "Christmas money" - the same again, for presents all round. Those two bonuses have long been standard across Germany. In addition, BMW workers get a further, 15 th month's, salary as part of a profit-sharing scheme. On top of that, there are generous health insurance and pension payments. Bernd Pischetsrieder, chairman of BMW, reckons overall German wage costs to be about twice those in Britain. It is scarcely surprising that high manufacturing costs have become the topic of economic debate in Germany today.
In almost every respect the economy seems to defy the laws of gravity. On wages, think of a number and double it. On prices, think of a number and double it (and then some, because the German mark is so strong). And - weighed down by that double burden - end up as one of the leading exporters world-wide. Germans themselves worry aloud that it cannot continue. The Munich Abendzeitung carried a cartoon this month summing up the perceived state of play.
A noticeboard proclaimed: "Jobs Vacant: liquidators... bankruptcy specialists... poverty Such pessimism is understandable. Unemployment has reached 3. 8 million, almost 10 per cent - well above Britain's 8 per cent. More than pounds 20 bn left Germany last year for investment abroad - "exporting jobs", in the current catchphrase. For Britain there appears to be some comfort here - the UK is the biggest single recipient of the new investment.
The electronics group Siemens, for example, is building a new pounds 1 bn microchip factory on Tyneside, which will create 1, 800 jobs. Senior figures in German industry complain that foreign companies hardly ever invest in German industrial jobs any more. True - and an understandable reason for Germans to start panicking, as they have begun to do. More embarrassing still, Germany this month announced a budget deficit of 3. 6 per cent, thus breaking the 3 per cent upper limit set at Maastricht for the planned creation of the single European currency. How are the mighty fallen. And yet...
THIS is not the first time that the end has seemed nigh. One notable feature of the German economy is that the bubble never quite seems to burst, however often the pessimists and the statistics suggest that it is about to. Whenever there has been a slowdown in the past 20 years, Germany's most influential magazine, Der Spiegel, has carried cover stories suggesting that disaster looms. When in 1993 it carried the picture of the sinking ship Germania printed above, the headline asked: "What can savute economy?" Within a short time, however, Germania was under sail once more. Last week, Der Spiegel was asking: It is tempting to accept the logic of Hans-Jurgen Meltzer, head of the Germany section at Deutsche Bank Research: "It's a German characteristic. There is permanent Schopenhauerian unease.
People complain, even when things are going well. There's a constant pessimism, like a worn- out record. " Others argue, too, that the periodic crises are themselves helpful, by forcing Germany to adjust, and thus helping the country back on to the economic straight and narrow, just when everything seems lost. Certainly, Germany has a high tightrope to fall from. In city and countryside alike, Germans enjoy a standard of living that Britons can only dream of. Prosperous little towns with well-maintained historic buildings, and gleaming (if dull) new housewares strung out between self-confident cities. In the villages, Mercedes-driving farmers are a familiar part of the landscape.
In the cities, the poorest estates can seem almost cosy-suburban to a British visitor. Hospital waiting lists are almost unknown. If they want to present their readers with the nightmare scenario, German newspapers lead off with the example of Britain. For the unemployed, too, things are financially less grim. German unemployment benefit is around two-thirds of one's last employed income - in other words, as much as millions of Britons receive in full-time jobs. Eastern Germany is a half-exception to this: except for the colour of its citizens' passports, east Germany is still another country, limping behind the west.
But even east Germany is already in some respects better off than Britain. On average, east Germans now take more foreign holidays than the British. British workers undercut their indignant east German colleagues on the booming building sites of Dresden and Leipzig. Indeed, the problem got so bad that the German labour minister complained publicly that Britons were willing to work on building sites for a mere pounds 6. 50 an hour instead of the German Across Germany, the national economic high-wire act can be difficult to explain. Certainly, the success does not come from working long hours. Try ringing a German office on a Friday afternoon and you will be answered by the cleaner or the answering machine.
Nor is it just the white-collar workers who take it easier than their European colleagues. At BMW, as elsewhere in Germany, Siegmund and his colleagues work a 35 -hour week. In Britain it was once fashionable to mock the tea breaks that seemed to be essential to industry. Germans do not bother with anything so petty: take the day off, or a long weekend instead. I once phoned a large company the day before a Tuesday holiday, hoping to catch an executive who had promised to talk to me. "No answer from anybody, " said the helpful switchboard operator. "But surely, " I asked, "the holiday is tomorrow, not today?"That's right. Tomorrow, it's 100 per cent certain that nobody will work.
Today, it's only 99 per cent certain. " Even during the hours that Germans do work, things are not rosy. Unit production costs are lower in Britain than in Germany. The brawny German mark - strong, and getting stronger - is an obvious exporter's nightmare. All of which causes much angst. Germans agonist over what they call Standort Deutschland - literally, "Location Germany", meaning the competitiveness of German industry, and Germany's attractiveness as an industrial base. Standort Deutschland is shorthand for "adapt or die." League tables emphasise that Germany is many times more expensive than the new market economies...
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Research essay sample on German Economy German Industry
