Friday, May 19, 2006

A ruthless efficiency.

Either the Financial Times has a translation problem, or German manufacturers have found disturbing new ways to compete:

Another factor in German companies' success is their regained competitiveness. Thanks to wage moderation, longer working hours and the selective offshoring of low value-added tasks, unit labour costs in Germany have stagnated since 2000. In the eurozone as a whole, they rose by almost 6 per cent.

This has allowed German companies to expand their market shares in spite of the euro's relative strength. The federal statistical office's export performance index, which shows the share of German goods in other countries' imports, fell from 1995 to 2000 but has risen every year since. "I meet Italian and French colleagues and they tell me we have become so competitive that we are literally killing them," says a senior German government official.

I'm guessing that the trick is in killing Italian and French manufacturers without diminishing consumer demand.

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