Exports

Official data show that German exports surged 7.3 % during the month of March to hit their highest level since records started being kept in 1950.
from The Wall Street Journal 5/9/11.
Look at this and know that taxes are one of the highest in the industrialized world. Take that and the so called "Well Fare State" together with the dreaded "Socialized Medical Care" plus more Government controls and than would somebody please tell me what they are doing right and why we in the US can not get off the ground.
Could it be that pure capitalism is not the answer or don't we have the product to sell to the world or are we concentrating on just a few high tech items mainly for the military or what is it?
The constant answers always given like " Taxes to high, Social Security costs, labor cost to high, to much government control, medical cost to high etc. etc." just don't hold water anymore. There must be another reason why we can not crank up our exports.
"Cheap Chinese imports" will not stand up either since Germany imports much from China the same as we do. So what is it? Dollar to high? No! That does not work either. Not enough help from the Government? See - to much Government control.
I would like to hear what you, the working people think. It seems to me that our leaders don't have a clue. Could the reason be way back when the business practice changed to the theory of :" Profit first, fast and maximum".
Ps.: If I see one more reporter or politician on TV marveling at the a "Made in USA " product while touring a factory, without looking at the machinery involved in the production (Hello Japan, China, Switzerland, Taiwan etc.) I will just scream!!! Same goes for the clowns comparing $8.00/Gal. cost for gas in Europe vs $4.00 in the US and telling us we should be happy. Add your health insurance bill to your monthly cost for gas and than compare, because that is how they pay their insurance (among other taxes). Could somebody tell us what the average cost per factory hour is in Germany vs here? Thanks for your input.

"There must be another reason why we can not crank up our exports."

What would you like to export? From what I see, the only thing you have left is crappy TV-shows and dubious Hollywood movies.
Cars? No.
White goods? No.
Your industrial production is gone, sorry.

Best Regards,

Benta.

Benta said:

What would you like to export? From what I see, the only thing you have left is crappy TV-shows and dubious Hollywood movies.
Cars? No.


Benta.

Click to expand...

While I don't know the answer and do agree to a point that some of the current US products are somewhat inferior to their European counterparts, I do have to say this. There is a whole lotta German products floating around in Europe that are quite garbage when compared to echte USA made goods.
How to get them into the EU market is a different story, and I have no answer to that. If I had to guess tough, it would take a huge marketing campaign to first change the minds of a great many folks - not unlike Benta's - to even take a look at an american made product without any preconception.

Regarding cars tough, I do recall seeing a huge number of Opels, Chevrolets and Fords cruising around the German highways. I actually own a Ford and a Toyota in Hungary. Not sure about the Toyota, but the ford is a European model that has never been seen in the US. That means the US automakers are represented, except they really should be considered European as they were vastly different from their US brothers.

BBC News - The secret to Germany's export success

Quote
Companies, with an eye on the up-turn, found ways of putting people on shorter time rather than sacking them.
Government helped to soften the burden, again with an eye on the future. Unions now recognise that the quid pro quo is some restraint on pay.


Take the case of Bosch, the maker of parts for machinery and cars. It did cut costs in the recession but not by laying off masses of people. Last year, its post-recession sales were a record 47bn euros, and it is promising to take on more staff.

-----

Well thats one way.... Would a US company behave in that way when profits and sales are falling?
Hack and slash to make the next quarter? or figure out a way to take a hit for a year and ride out the downturn with an eye on 2-3 yrs down the line?

Boris

'Perhaps a new course should be introduced for MBA and business management studies : - "Your workers are also your customers"

Boris said:

.......Perhaps a new course should be introduced for MBA and business management studies : - "Your workers are also your customers"

Click to expand...

BLASPHEMER!!!!!!

You may as well tear up your Harvard application cause you'r never going to get in with an attitude like that......

Boris said:

Companies, with an eye on the up-turn, found ways of putting people on shorter time rather than sacking them.

Click to expand...

Boris

Many privately held companies did in fact do just that.
They are now back in full hours, no rehiring, retraining etc.
I guess they did consider looking further than the next quarter.
Willing to bet none of them ever saw the inside of an MBA classroom tough.

I don't know why this dogma of being a next exporter is such an issue. For example if you look at

List of sovereign states by current account balance - Wikipedia, the free encyclopedia

there is absolutely no correlation between quality of life of a country and its trade deficit. I guess the reason why politicians give lip to exports is that it is the easiest way to create jobs. Germany and France are on the opposite ends of the table, but when you visit either country, they look the same. And I may have a personal bias, but if I had to choose between either one to live in, it would be France.

Is a Whirpool washing machine made in Slovakia with Texas Instruments semiconductors made in the Philippines not American? Or is it? I don't know....you can tell me. I have no idea where the money from the end sale goes. I guess an iPhone made in China sold to Germany only affects the Germany-China balance sheet too????.....

A lot of our trade balance is also because we import a lot of energy. Why not? Import whiat you can while it is economical and then use your own.

juergenwt said:

Official data show that German exports surged 7.3 % during the month of March to hit their highest level since records started being kept in 1950.
from The Wall Street Journal 5/9/11.

Click to expand...

'The Economist' had a big multi focus issue last year on Germany on things they are doing to encourage economic growth and a sustainable economy. I picked out a few things we could do in the USA that worked for Germany and were not too alien for our culture. Or, so I thought?

As I recall.....
Reduce imports.
More import tax.
Focus on can do demand products.
National policy for employment.
National policy for retraining workers.
National policy for export growth.
Early sorting for college or trade school.
Trade schools that actually prepare for jobs.

Not a single response thought we could do anything........
We need free markets.
Business knows best.
Workers can train themselves.
Thats' Germany not us.
Import taxes very bad.
No gov't in my life.
Socialism.

So we have a flat growth rate, much debt, high unemployment, outsourced industry, an official inflation measure that somehow doesn't tally what people buy, tax cuts, the highest per capita spending on health care, politicians fixed on birth certificates, death panels, bailout gifts to industry and spending cuts.

Anybody expect much to change?

rkucbel1 said:

Is a Whirpool washing machine made in Slovakia with Texas Instruments semiconductors made in the Philippines not American?

Click to expand...

Well, in my book it isn't American.
Doesn't mean it isn't good or that I wouldn't consider it, but it isn't US made.
Similarly, I'd consider a Mazak built in KY, a BMW built in SC or a Siemens built in NY a US made product.

The tougher question is whether Germans consider an Ipod Chinese or American. In my book it is Chinese, regardless of the Apple logo.

As far as the quality of life, I'm not sure.
I guess if you consider working for Wallyworld for $8.50 an hour and purchasing everything from television through a cheap ass computer to your used automobile using a myriad of loans and credits while wearing clothes mostly bought on layaway a good quality of life, well, so be it.
Most americans today get into financial handcuffs as soon as 18 years of age and will wear them until the big bell rings.

What's the solution? I still don't know. What I do know is whatever we're doing now isn't sustainable for much longer.

It seems to me that the attitude that has developed that says:
"How does this impact the next quarter'?
is the main reason that we have destroyed our manufacturing base. Wall street is nothing more than a slot machine. You are not allowed to take the time to develop an idea or invest in R&D, as it will affect the next P&L statement.

I was reading the current issue of Machine Design, and the "letters to the Editor" were each devoted to whining about being laid off, even with all of their expensive education and degrees. Everyone seems to be depending on someone else to provide them with a job.

Well, folks...being born in '35, and growing up in the aftermath of the depression, I learned to not depend upon anyone. Graduating from High School in '53 (when a public education still had value) I started my own business (failed miserably, but learned from the experience), and never really looked back.
I guess that I am the typical serial entrepreneur, having had several businesses, and at present I am exporting all over the world, with distributors in Belgium, England, Australia, Canada, all over the US, with a product that I have patented, and machine, assemble, and ship right here in the US. Other than the screws, everything is made here, and I am working seven days a week. The VMC is a Doosan 30x16L and makes it all possible. I have hired some help, and will be adding more within the next 3 months.

I suggest that with all of the intellectual power that is on this site, each one of you could design a product and market it. Next door, is a very good tight tolerance machinist that is stuck in neutral. He has several good ideas, but is too afraid to do anything with them. Fear of Failure is killing our initiative.
Once upon a time, we led the world...and we can do it again. We simply have to stop depending upon someone else to do it for us.

I am in California, and according to everyone, all business is leaving the state for cheaper rates. I don't agree.

The saw guy

Benta said:

"There must be another reason why we can not crank up our exports."

What would you like to export? From what I see, the only thing you have left is crappy TV-shows and dubious Hollywood movies.
Cars? No.
White goods? No.
Your industrial production is gone, sorry.

Best Regards,

Benta.

Click to expand...

You're just betraying your own ignorance here, man, sorry. Over 90% of our exports last year were manufactured goods. Although a lot of it is for commercial and industrial applications, not consumer goods.

"Over 90% of our exports last year were manufactured goods."

The U.S. Census Bureau disagrees. Year 2010:
Exported Goods: M$ 1,288,662
Exported Services: M$ 545,502
Imported Goods: M$ 1,935,740
Imported Services: M$ 394,153

http://www.census.gov/foreign-trade/Press-Release/current_press_release/ft900.pdf
page 4.

Benta

The argument that recent growth in Germany's exports somehow results from its socialist regime is absurd.

Germany has been declining ever since Bismark forced the Germany states together and started to create a totalitarian state.

Before WWI Germany's economy was nearly as large as that of the United States. The same could also be said of the UK's economy. Currently the US has an economy 8 times as great as Germany (and the UK as well).

The reason for this decline in Germany and the UK is their totalitarian, socialist regimes which stifle economic freedom and productivity. Every year fewer and fewer people do productive work in Europe and more and more of them are on the dole, become government workers, or are otherwise not profitably employed.

This trend will continue in Germany, the UK and the US as long as socialism/totalitarianism continues to grow. The reason why the US gained such an advantage on Europe was due to its victory in the war and more importantly to its free-er economy.

jscpm said:

The reason why the US gained such an advantage on Europe was due to its victory in the war and more importantly to its free-er economy.

Click to expand...

Its victory in the war?

jscpm said:

The argument that recent growth in Germany's exports somehow results from its socialist regime is absurd.

Germany has been declining ever since Bismark forced the Germany states together and started to create a totalitarian state.

Before WWI Germany's economy was nearly as large as that of the United States. The same could also be said of the UK's economy. Currently the US has an economy 8 times as great as Germany (and the UK as well).

The reason for this decline in Germany and the UK is their totalitarian, socialist regimes which stifle economic freedom and productivity. Every year fewer and fewer people do productive work in Europe and more and more of them are on the dole, become government workers, or are otherwise not profitably employed.

This trend will continue in Germany, the UK and the US as long as socialism/totalitarianism continues to grow. The reason why the US gained such an advantage on Europe was due to its victory in the war and more importantly to its free-er economy.

Click to expand...

Hmmm...interesting assertion, I think you are overlooking some things.

Now, do you suppose that a tiny part of Germany's relative position might have some thing to being bombed to rubble twice?

Do you suppose that our ascendancy might have something to do with our NOT having been bombed to rubble?

Do you suppose that perhaps having 3.8 million square miles of essentially unexploited resources might have helped?

In 1910 Germany had 65 million people, the US had 93...today we have 308 million and Germany has 82 million. Since Germany doesn't really mine anything their entire GDP is dependent on actually making stuff. So with 1/4 the people and no resources they have an economy 1/8th ours?

Do you suppose having the Atlantic on one side and the Pacific guarding our other flank might have helped?

Just some other options to consider.


Oh yeah...the fastest growth in the German economy was under totalitarian conditions with a command economy...so you can't blame that.
In fact in the US the same is true...look at any war time economy.

Oldster,

I was reading the current issue of Machine Design, and the "letters to the Editor" were each devoted to whining about being laid off, even with all of their expensive education and degrees. Everyone seems to be depending on someone else to provide them with a job.

Well, folks...being born in '35, and growing up in the aftermath of the depression, I learned to not depend upon anyone. Graduating from High School in '53 (when a public education still had value) I started my own business (failed miserably, but learned from the experience), and never really looked back.
I guess that I am the typical serial entrepreneur, having had several businesses, and at present I am exporting all over the world, with distributors in Belgium, England, Australia, Canada, all over the US, with a product that I have patented, and machine, assemble, and ship right here in the US. Other than the screws, everything is made here, and I am working seven days a week. The VMC is a Doosan 30x16L and makes it all possible. I have hired some help, and will be adding more within the next 3 months.

Click to expand...

I really admire your attitude, I was just wondering though how does one like you get his start? The problem I see is for a lot of stuff you really need to either know the industry real well before trying to come up with something better to compete with, or get in on the early end of the technology spectrum (think Gene Haas). The problem I see is that for most people the best way to do this is to work in that industry first. Now when you read of people laid off from large plants keep in mind that many of those industries have enormous costs of entry to compete in. Do you really expect the guy who just got laid off in the tool room to compete with GM? My father an EE has an idea for a product that he sees a niche for in Aerospace, the problem is that even if his friend a software engineer do the design at nights and on their own time, the hardware/software certification will likely require at least $1million before they can ship their first product. Unfortunately I think that may be a barrier too high for the two of them to meet.

Now imagine being laid off from an industry in a down turn even with a good idea, investing the money becomes harder than ever. I don't want to sound like a defeatest or anything and have most of my life ahead of me to learn, but just wondering how one goes about finding that niche?

As for Germany I got a tour of a $30million dollar production line at work today, and was asking the process engineer who speced out everything how it was that the Germans are doing as well as they do. One thing that it sounds like the Germans do well is have mid sized 100+ people owner operated companies. The guy was showing me some of the tooling plates with custom made German tooling. He was saying that when they toured the company that had 500+ employees, he said that the owner still is the only one allowed to run the heat treat oven as he considers this too good of intellectual property to let loose. It seems like in my mind that the private company with a good product run by a good founder is the best way to go. These Megacorps seem to think that a few good lawyers to write really mean Non Disclosure Agreements is all it takes to protect intellectual property!

Adam

An honest question about Germany:

What is the percentage of people living in Germany who pay NO income tax?

Let's for the sake of this discussion leave off the "Corporations" and just deal with individuals.

how does one like you get his start? The problem I see is for a lot of stuff you really need to either know the industry real well before trying to come up with something better to compete with, or get in on the early end of the technology spectrum (think Gene Haas). The problem I see is that for most people the best way to do this is to work in that industry first.

Thanks for the question. In '87, I was looking for something to do after an accident that messed with my short term memory (I couldn't add 2+2). I stated taking jewelry classes at our local community college. I figured that it was metal, and I could have some fun while I recovered.
There was a weekend workshop, and the instructor set up a small bench top 20 ton press (nothing fancy...built with 1" allthread) to show what could be done with Urethane and a one sided die. Several attendees got really excited and expressed an interest in getting one of their own. The instructor said that you would have to build your own, as there was nothing on the market that was designed specifically for this application.
Those words got my attention, and by the end of the class, I had orders for five. That led to what became:
Bonny Doon Engineering Hydraulic Presses and Tooling for Metalsmiths and Jewelers

Kevin Potter (another poster on this forum) builds a version for the same market.

Several years ago, I sold the business to a friend as they were getting too heavy to load into boxes (and I was wanting to do other things).
I had developed a jewelers saw, and kept it and a couple of other items and started a new company:
Knew Concepts - Fine Metalsmithing Equipment Designed for Artisans - The Red Saw - Santa Cruz, CA

This is the one that has me working seven days a week.

What each one of these have in common is that I saw an unfilled need. The lowly jewelers saw (coping saw, fret saw for woodworkers) hasn't been changed in 500 years, so it was wide open territory. I developed a truss frame that is extremely rigid, and prevents flex of the blade, and the blade life went up exponentially. It was incredibly easy to secure a patent as I went in a direction that hadn't ever been explored. I found some Titanium that was rejected from the F-22 program, and I am using this material for a high end version. It is my attempt to "beat swords into plowshares".

There are all kinds of small scale opportunities to do well. Not every idea requires a zillion dollars to get started. I built these two out of my back pocket, starting with a Bridgeport and a Logan lathe in my garage. We have been led to believe that bigger is better....not necessarily! By staying small, I have direct contact with my customer base, I am a person, not a corporate conglomerate, and with the power of the internet, I have global reach.

I hope that I have answered some of your questions.

Lee (the saw guy)

thruthefence said:

An honest question about Germany:

What is the percentage of people living in Germany who pay NO income tax?

Let's for the sake of this discussion leave off the "Corporations" and just deal with individuals.

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All of them...they have a VAT.
Well not really, but 1/3 of their income comes from a VAT.
Couples pay nothing on their first 16k euros...around $23,000
Individuals start at 8000.

Capital gains is 25%, the highest income bracket is 45%.

Since the median income is around 24k/house is should be around 35% pay no income tax...bear in mind however that everything they buy is taxed at 19%.
Additionally if you look at the benefits I suspect you will find that more like 50% of the population is tax negative.
Germany believes that a well educated healthy population leads to prosperity...they also believe that the return on the investment in the lower income brackets helps economy, which increases tax revenue.

Google is your friend.