It is the icon of the German middle class, and “the German middle class” is the industry that international competitors have so far spoken of with recognition: Miele. From “Mom does it with Miele”, as the advertising message of the Westphalian appliance manufacturer stated in 1957, to the current slogan “Quality ahead of its time”, Miele has marked the conscience of several generations of housewives. cooks, computers and cleaners.
In addition, the company is family-owned and is already the fourth generation. The boss's name is like that of the brand: Miele, Markus after his first name. The family is present wherever progress has been made in Germany: Christian Miele, for example, was director of the startup association until last year. When he resigned, he wrote in the federal government record: “In general, we need more speed in the interest of innovation and the future viability of our country.” There is a risk of “innovation poverty.”
“In Germany, approvals take longer than acquisition and construction”
And now Markus Miele speaks. In an interview with the newspaper Handelsblatt he said: “If a place is more expensive in everything, it becomes difficult.” Germany has always been a high-wage country, but now energy costs, taxes and bureaucracy are also at an all-time high. He gives urgent advice to politicians: the price of electricity “should drop significantly for everyone. To do this, the State would have to reduce high taxes.” But it is also urgent to act to reduce bureaucracy: “Bureaucracy is a big problem in Germany, I know many points where we could start.
Photovoltaics is an example of this: if we want to install a system on the roof of a factory, approval takes longer than procurement and installation. There are many regulations that make doing business difficult and sometimes even contradictory. This limits our ability to innovate more and more.”
There is a sad reason why the family, with the name that everyone knows in Germany, goes on the offensive. On the occasion of the company's 125th anniversary, Miele had to announce that the company will no longer operate like this. Miele has to eliminate around 2,000 jobs. The Gütersloh washing machine factory is particularly threatened: production is no longer possible due to the poor conditions of its location in Germany and is gradually being moved to Poland. The group has around 23,000 employees worldwide, but jobs can hardly be maintained in Germany.
One can certainly object: it's not that bad. In 2019, before the pandemic, around 20,000 people worked for Miele. Of the maximum 2,000 jobs that will be lost worldwide, only some will be layoffs. The conclusion is that after the “total felling”, as many media call it today, Miele will continue to employ many more people than in 2019. And the fewer layoffs affect industrial jobs.
The industry is threatened by “a conflagration”
However: the Miele case has a symbolic value for the German crisis, which is accompanied by a deindustrialization such as had not been seen in the country since the beginning of the opposite trend, industrialization, which Miele also promoted. “The manufacturing industry is on fire. There is a risk of forest fire,” warn the sector associations. The chemical industry alone has lost 23 percent of its production volume in two years. In one of the many inflammatory letters currently reaching Chancellor Olaf Scholz, the four main German business associations (DIHK, BDA, BDI and ZDH) sounded the alarm last week: “Frustration and uncertainty are growing in many companies, and relocation of industrial production abroad is increasing.”
Associations spread everything but bare theories. Deindustrialization has started a long time ago: BASFBosch, Volkswagen Vz., WKN 766403″>VolkswagenBavarianconti – The best managements of German industry announce one after another massive layoffs. A few days ago the successful ZF Friedrichshafen group received bad news: 12,000 jobs will be lost at this automobile supplier alone. Miele is right on top of that.
Capital flows to Germany are drying up
Economic researchers also warn of a “deindustrialization of Germany” because politics is continually deteriorating conditions there. Jens Südekum, professor of international economics at Heinrich Heine University in Düsseldorf, puts it this way: “I am concerned about the latest figures on the development of industrial production in Germany.” The German Economic Institute estimates that around 132 billion will already be in In 2022, more direct investments in dollars left Germany in the same period than were invested in the Federal Republic. These are not only the largest net outflows ever recorded in Germany. Germany is therefore suffering the largest capital outflow of all OECD countries. No improvements are expected for 2023 and 2024.
According to a survey by Deloitte and the Federation of German Industries (BDI), 67 percent of companies are moving their production abroad, especially in the key sectors of mechanical engineering/industrial goods, chemicals and automobiles. “Deindustrialization is already occurring on a significant scale. If general conditions continue like this, it is most likely that more companies will follow suit and migrate increasingly important parts of the added value,” says Florian Ploner, industrial analyst and partner at Deloitte.
The Miele shock has startled Federal Economy Minister Robert Habeck, but he seems helpless. In the “RTL Direkt” program on Monday afternoon, Habeck said: “We have to encourage investments. We see this together. What we haven't fully figured out yet is how we do it. But for this it is first necessary to debate.” But that will no longer help Miele or everyone else who increasingly questions Germany as a place.
The article “Habeck watches helplessly at Miele as Germany slides towards deindustrialization” is by WirtschaftsKurier.