Gears were seizing up and gaskets burning out long before the emergency stop on the autobahn. Now the consensual German model of business has suffered multiple mechanical failures. Wirecard, the payments group that bolstered German tech credentials, has imploded in fraud. Bayer is taking up to $11bn in charges mostly triggered by a disastrous US takeover. Once-proud conglomerates Siemens and Thyssenkrupp are shrinking. Volkswagen’s service life shortens each time Tesla’s outlook improves.
Worried engineers are peering under the hood. What has gone wrong? Germany has been Europe’s postwar economic motor. Technocratic and collaborative, German business fostered close links with workers, lenders and the state. The US model looked anarchic in comparison — warring bosses and entrepreneurs pumped up with equity and spoiling for a fight. But coronavirus has intensified the challenges facing manufacturing-focused Germany and the opportunities for the tech-led US.
Germany, can we talk? “Sure. I’m driving but I’m German so that’s second nature,” jokes an economist via his hands-free, “I don’t think there is any common thread between Wirecard and these other examples.” According to him, the worst accidents occur when German business adopts US ways. Wirecard had a two-tier board structure, like most German businesses. But its supervisory board was seemingly full of corporate yespersons, not vigilant workers as governance rules dictate. And the group was led by a bossy entrepreneur.