I could have asked why do we need so many immigrants? There are three inputs to economic activity, land, labour and equipment. Labour can be further split into skilled and unskilled. Unskillled is easy to recruit and in the UK involves little long term costs thanks to a US imported hire fire them culture. Investment in equipment however does incur considerable long term costs as does skilling your own people. Labour and equipment are functionally substitutable for each other to a considerable extent but for big business its a no brainer just go out and buy cheap labour from Bulgaria etc or even better India where you can source already trained skilled labour as well. Its a double whammy as the great British taxpayer gets to pay the social costs of the immigrants. So you are privatising the profits and nationalising the costs. Wunderbar as the Germans say.
Great for profits and top management with their rewards linked to profits but very bad for our indigenous young who need training. Hence as Matthew Lynn writes in today's DT business is protesting, I would say squealing. about HMG's plans to reduce immigration, Business cares not a jot about immigrant welfare. Their attitudes are as they were in Victorian times, drive down labour costs and increase profits. We tackled this problem in the 19th century Britain with the setting up of trade unions who, realising they had to control the way laws were made, set up the Labour party.
The Labour party is sadly no longer the party promoting workers interests. It has been taken over by the liberal elite to promote their crack pot ideas for social engineering, diversity, feminism etc. To parody George Orwell its black face good, white face bad , homosexuality good heterosexuality bad, women good men all evil rapists, North London BBC driven media good, Northern working men's clubs bad. This will of course lead to electoral and economic disaster. but it will be the workers not the political elite who pay the price.
To return to my title question why do the Franco Prussians beat us in the productivity stakes. They have far tighter labour laws which forces employers to make far better use of their existing work force. They have genuine worker representation on company boards. They pay far more attention to real apprentice ship training and far less to media studies etc. One of the best apprenticeship schemes in the South West is run by the French company EDF. Germany industry is run by engineers not PPE and legal graduate bull shit merchants that dominate our company boards and the higher echelons of government. These people are very good on the media but tend to be very poor at running anything even breweries. We have to rid ourselves of our dependence on cheap imported labour. My esteemed neighbour Lord Paddy Pantsdown could not answer my wife's simple question in a public meeting, what do we do when our imported care workers get old and need care? I ask Mogg to translate into Latin, who cares for the worn out aged imported carers? Lib Dems? I think not.
As Barnier says the clock is ticking on this. Business must recognise this, adapt and stop this pointless political lobbying and PR to try and tilt the rules in their favour and get off the cheap imported labour fix. One of our great companies was Coats of Paisley the thread makers. It was the first genuine multi-national. Around 1920 it had manufacturing plants in almost every country in the world. When it trained its management from its apprentices it did well. When it went over to graduate management it lost its place. Coats is still there but is a shadow of itself. Paisley is now best known as the hometown of AF Neil as Nigel Lawson, Thatcher's great reforming Chancellor, is now best known as Nigella's father.
9 comments:
http://www.tradegood.com/en/insights/viewpoints/market-features/manufacturing-lessons-from-germany.html?targeted
6 November 2013
Manufacturing lessons from Germany
Apologies link not working and can't copy page here as more than max Char.
I guess my thesis is that UK business is dominated by a short term invest as little as possible culture. It was the same in UK politics when I worked in the Civil Service.
That's how we ended up with incredibly expensive in the long term PFI contrascts
There is no political backing for long term planning except for vanity projects like HS2.
Dr Edmonds, I would venture to suggest that part of Germany's success (and to a lesser extent, that of France) has been a function of its ability to ensure that domestic SMEs - not just large corporates - have access to an adequate long term supply of capital at an acceptable price.
We have just thrown away the opportunity to make good some of our past mistakes as regards providing adequate long term financial support for UK SMEs - including early stage/start-ups. In my view we should have retained control of both RBS and Lloyds Bank. They could and should have become cornerstone investments in a new UK sovereign wealth fund.
I agree with Anon1 comment. France has money market funds restricted to buying French securities. Germany has its state owned Landesbanks that support local SMEs.
On Anon2 we need locally owned banks like Martins that Barclays were allowed to gobble p with all the local Liverpool board disappearing
I agree with Anon1 comment. France has money market funds restricted to buying French securities. Germany has its state owned Landesbanks that support local SMEs.
On Anon2 we need locally owned banks like Martins that Barclays were allowed to gobble up with all the local Liverpool board disappearing
http://www.tradegood.com/en/insights/viewpoints/market-features/manufacturing-lessons-from-germany.html?targeted
Manufacturing lessons from Germany (2-2)
Technology development and innovation are of course essential to the growth of any economy. Technology is the key force that enables a country to progress and flourish. Germany knows it very well and thus makes good use of new innovative technologies to combat the cheaper manufacturers in Asia. Over the years, the German government has emphasized the long-term development of the manufacturing sector and invested a great deal of resources in research and development of innovative technologies, including renewable resources, environmentally friendly biotechnologies, and so on. With long-established institutes such as Fraunhofer and the Max Planck Society contributing to technology development and innovation, Germany has become a world leader in those fields.
Support from the German government also fosters its close cooperation with manufacturers and universities. With the unstinting support of government policy, manufacturers, universities and government research centers work closely in technology research and development, such as developing precision textile machinery for local and overseas factories. They also cooperate with machinery manufacturers, software developers and robotics companies on state-of-the-art technologies that make the whole manufacturing process more efficient and productive. In fact, the three parties have established a unique trust over the decades that enables them to share their valuable knowledge and experience with each other and seek out the best technical solutions for the sector together. Such unique cooperation is rarely seen in other countries and has molded Germany’s privileged place in technology development internationally.
Such close cooperation between the government, manufacturers and schools has produced a steady supply of skilled labor in the manufacturing sector. As the entire German economy depends greatly on skilled labor, a steady supply of skilled labor is of the utmost importance. Therefore, the government works to ensure that manufacturers have the access to well-trained technicians, engineers and skilled workers through the means of vocational training and technical apprenticeships. Meanwhile, employers from different fields all actively participate in the nurture of talent. They work together with schools and sponsor vocational training programs to get graduates well-prepared for their future jobs. Germany’s robust education system and job-oriented training for specific sectors enables the country to nurture around 80,000 technicians and skilled workers every year.
With the supply of skilled labor ensured, a robust employment system should result. Germany is well known for its employee-friendly employment system, where workers are well paid, given a strong voice on labor issues, and enjoy comprehensive healthcare and good job security. Even at the height of the crisis, when waves of layoffs swept across Eurozone countries, there were few layoffs in Germany. Since workers enjoy good job security, it is easier for the country to introduce new and more efficient technologies as most of the workers are willing to embrace new technologies and see them as ensuring the long-term viability of their jobs. In the meantime, job security reduces the employee turnover rate, which is the main reason why German employers are happy to invest heavily in the employee training that is conducive to the long-term development of the whole sector.
To conclude, the secret to Germany’s manufacturing success lies in the country’s commitment to the sector. Its all-round efforts to drive growth have also enabled its economy to perform in a very solid fashion. Some see the resilience of Germany in the European debt crisis as a miracle. Even US president Barack Obama said Americans can learn from Germany’s success, which has made it the envy of many of its counterparts.
Manufacturing lessons from Germany (1-2)
While the prospects for the European economies remain uncertain in the haze of the European debt crisis, German’s economy has reported a healthy pick-up, particularly in the manufacturing sector.
Since the European debt crisis broke four years ago, European countries have been struggling in the face of tough challenges, such as sluggish markets, high unemployment rates and an increasing debt burden. Despite the negative impact of the debt crisis, Germany retains a robust economic strength that has outshone its European counterparts. The country has also taken up the leading role in responding to the issues of the debt crisis, including bailout plans, rescue measures and closer collaboration between Eurozone countries, which in turn has made Germany’s economic conditions and political development a focal point for the world.
Germany is the largest economy in Europe and the second largest exporter in the world after China. The country’s 2.7 trillion euro GDP accounts for nearly 30% of Eurozone output. Over the past decade it has posted the fastest GDP per capita growth, making it the second largest production powerhouse among the G7 economies. With the second-lowest unemployment rate in Europe and an economic growth at 0.7% in the second quarter of 2013, the country successfully weathered the 18-month economic downturn in the Eurozone. As seen from the recent Global Manufacturing Competitiveness Index 2013, Germany ranked second in global manufacturing competitiveness after China, but topped the list among the developed countries. It has also gained political clout thanks to its role as the biggest financial contributor to Europe’s bailouts.
Known for its industrial and manufacturing excellence, the manufacturing sector makes up 20% of the country’s economy, a key driver of economic growth, and has created a list of world famous brands, including BMW, Siemens and Volkswagen. Considered as the birthplace of the automobile, the country is the absolute leader in automobile production in Europe. Many globally renowned automobile manufacturers, including Audi, BMW, Daimler, Ford, Opel, Porsche and VW, have chosen to expand or set up factories in Germany. Besides renowned large-scale enterprises, there are also numerous world-class SMEs in the German manufacturing sector, many of which dominate the global market in their fields. With one-third of SME workers belonging to the manufacturing sector in Germany, SMEs form the backbone of the economy.
The winning edge
The fact that Germany is immune to the slackening economic climate is attributed to the strong support from the manufacturing sector. So what are the success factors that enable the country to maintain its competitive advantages in spite of the debt crisis?
One major factor for Germany’s success is a supportive government policy. Germany possesses a strong and well-developed mechanical-engineering industry with a solid tradition and foundation and enjoys a leading status in technology development, again with strong support from the government. Over the decades, the German government has invested heavily in boosting its production capability. For example, the government readjusted its education system to guarantee manufacturers access to a skilled workforce through apprenticeship programs, while dozens of applied-science research institutes are funded by the government to develop advanced manufacturing projects. It also assured access to funding for many manufacturing SMEs via municipal banks.
http://www.tradegood.com/en/insights/viewpoints/market-features/manufacturing-lessons-from-germany.html?targeted 6 Nov 2013
Most of all engineers are high status and respected in Germany. The UK, whose wealth was founded on engineering in the 19th century, has never been comfortable with design and production engineering as a high status professsion. How many engineers are knighted compared to civil service pen pushers? Engineers create jobs for workers, pen pushers do not.
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