2009 October, 19th

Phil Butler

More news has surfaced further indicating Germany industry being sold off piece meal. Arab investors, floating in cash from oil revenues, continue to accumulate shares in what were the world’s iconic industries. With the announcement of ThyssenKrupp’s impending deal to sell off a large share of Blohm + Voss shipbuilding, it is becoming apparent that Germany and other countries are being forced into liquidating what essentially amounts to their industrial and technological heritages. Once the envy of the world with regard to industrial innovation and might, Germany in particular appears on the verge of being “bought out”, in some sectors. This is not only true for Germany, but for much of the rest of the world.

Germany as a sort of “industrial legend” seems woefully pitiful compared to their relative position and strength even before reunification. In some sectors like the auto industry (third in the world), shipbuilding, and perhaps the formerly successful chemical industry, it looks as if Germany is not much better of than the United States as an industry leader, at least not one which owns most of its own capacity. From Daimler, to ThyssenKrupp, and eventually chemical giant BASF, it appears the search for cash has led to investors from oil rich Arab states. Though economically feasible, seeing Blohm & Voss and other renowned producers of excellence gobbled up by what amounts to Germany’s own oil expenditures, is sad.

The legendary quality and style of Mercedes, for sale.

News from back in March revealed Daimler’s money woes (even though it was painted as a strategic move) when the company sold off nearly $3 billion of the company’s shares to Abu Dhabi’s Aabar Investments. They became the largest shareholders at just over a 9 percent stake, just ahead of the Kuwait Investment Authority, which holds another 6.9 percent of the company. The implications are far reaching, but from one German perspective the whole affair indicates a great weakening of not only Germany’s industrial might and fortitude, but that of many other Western economies.

On the heels of Daimler’s “sell out” comes this latest news from ThyssenKrupp. Shipbuilding in Germany just 3 years ago was one of the country’s most applauded industries, with Blohm + Voss being one of the most historically significant ship construction legends in the world. Not many think back very far, but this is the shipyard which produced some of the most notable examples of that industry ever designed and built. Most notable of all, the battleship Bismarck, which by almost anyone’s account was perhaps the most beautiful and well constructed pieces of naval engineering ever laid out. I remember well reading stories about this extraordinary vessel, which met a disastrous and fabled fate on May 27th, 1941 during WWII’s Battle for the Atlantic. Interestingly, one of the most legendary engineering aspects of Bismarck was the steel with which its armor was made, being of the KC type from none other than Krupp. Again, arguably some of the most resilient metallurgy ever conceived for its strength.

Even Bismarck, though virtually unsinkable, went beneath the waves.

What has all the history lesson to do with this current state of affairs? Well, for one thing a sort of industrial pride is at stake in the world wherein some of mankind’s greatest achievements (although sometimes dubiously associated with warfare) are swept under the collective rug. Germany for one being apparently obscured as a world shaker in solving engineering problems, out of some bad business decisions or even worse apathy by the people of that state. Steel, cars, ships and chemical solutions not being the only commodities seeing decline here.

Just so the reader knows, this “cash flow” problem is not only endemic or Germany or Europe for that matter. The U.S. is now acting out a role as a market which can no longer be counted upon as an economic ally, or more precisely a trade partner for Germany’s (or anyone’s) success. Arab and other investments in the U.S. similarly impact the American industrial psyche, if we can call it that. This idea would have been called “nationalistic pride” before WW2, but that terms lends itself to fascist regimes and those horrors. These days there really is no term for being proud of a nation’s propensity for engineering, perhaps because there is no longer pride. The U.S. public has been satisfied with consuming things rather than making them for decades. GM and other companies evidently not even being good enough for Arab oil tycoons to invest anything, except for buying off some corporate skyscrapers. Heck, maybe this is good news for Daimler, ThyssenKrupp, and the rest of the German industrial economy, at least the Arabs find enough value to actually invest at all.

Monopoly In Real Life

in simplistic but accurate terms what we are looking at is a real life version of Parker Brothers’ ever popular Monopoly board game. For those of you who have not played, when the fortunes turn and players with valuable properties (which theoretically can earn them a win) are forced to sell because of cash flow to players with more cash than property, the tide of the game turns. Those who have played the game will identify with owning Boardwalk and Park Place with no hotels on them, later in the game having to mortgage or sell them for what they can get. Once this happens in the board game (or in the real one being played now), the end is inevitable.

We cannot blame the Arabs, Chinese, Japanese, or even the Brits for this state of affairs. What would we do strapped with cash and with no real industrial capacity? The problem has been one of handing over sectors of business wholesale to other countries. A good instance would be U.S. companies sending millions of jobs to Asia. What were these people thinking? About workers in Germany, the EU, or the United States? Decidedly not. It is also a little ironic that the West’s own money is being used to essentially buy them out. Reliance on oil and cheap labor have now come around to bite much of the world in the butt.

Editor’s special note:
This video might seem somewhat controversial given that Bismarck was in the arsenal of Nazi Germany, but if the reader forgoes that judgment and listens to the pride of the brave German sailors who Jim Cameron invited on his expedition to the ships watery grave, just a little of this idea of “industrious pride” I refer to can be gleaned. These industries, and many like them around the world, grew primarily out of mankind’s sense of accomplishment. Now even the more “positive” elements of this ideology or culture have been all but lost apparently.

• 2009/12/10 -- Jobs at Mercedes-Benz Singelfingen Are Safe, Daimler Says
• 2009/10/02 -- Mercedes Benz Sales Still Plummeting, And It’s No Wonder

About the Author

Phil Butler is editor-in-chief of Everything PR and senior partner at Pamil Visions PR. He’s a widely cited authority on beta startups, search engines and public relations issues, and he has covered tech news since 2004. Phil wrote in the past for ReadWriteWeb, Mashable, Profy, SitePoint, Search Engine Journal, AltSearchEngines. Follow Phil on Twitter or send him an email at phil [at] pamil-visions [dot] com.

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