In German public debate, the episode is regularly presented as one of the striking symbols of Germany’s loss of competitiveness. The manufacturer of luxury household appliances Miele, affected by the drop in orders and the increase in its costs, announced in February its intention to relocate a large part of its production to Poland. The company, emblematic of “made in Germany” for household equipment, is turning its back on manufacturing its famous domestic washing machines in Germany. Two thousand seven hundred jobs are affected, notably in Gütersloh, in North Rhine-Westphalia, headquarters of the family group founded one hundred and twenty-five years ago.
Miele has been added to the list of German companies which are relocating their production or preferring to invest abroad rather than in Germany, in a context of a general decline in investments. Behind the recent very visible announcements from the big names in the industry (Bosch, ZF, Continental), which are cutting thousands of jobs in Germany, many SMEs feel threatened. According to a survey by the IG Metall union, carried out among 2,500 employee councils and published at the end of March, 50% of companies invest too little in their sites across the Rhine.
“Instead of actively tackling current challenges, companies are increasingly questioning locations and employment”, underlines the union. A March study by the German Chamber of Commerce and Industry notes that 35% of companies that invest abroad do so for cost reasons, and no longer to conquer new markets. The two major sectors most affected are industries that consume a lot of energy as well as the automobile industry, the IFO institute highlighted in April.
“Alongside energy prices, there is the immense upheaval that the automobile must face, towards electric and digital. This means that many companies are trying to reduce costs by restructuring their production., confirms Oliver Falck of the IFO. This lack of investment has dramatic consequences on the modernization of the country. According to figures from the KfW bank, business spending in Germany, which represents 55% of the country’s investment efforts, has stagnated for a decade at a level well below the 1990s.
They are clearly insufficient to renew the country’s productive apparatus, in a context of digital and ecological transition. Foreign groups cannot reverse the trend: according to the EY firm’s barometer, published at the beginning of May, investments by foreign companies in Germany, which have fallen by 35% in seven years, are at their lowest in ten years.
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