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As Germans voted in parliamentary elections on Sunday that will have wide repercussions across Europe, GlobalPost takes a look at some of the major issues. Senior correspondent Paul Ames made a 900-mile roadtrip across all 16 German states to take the measure of the continent’s most influential country.

Mittelstand 09 10 2013
Small and medium sized companies, many of them family owned, are the driving force behind the "Made in Germany" reputation for quality. (John MacDougall/AFP/Getty Images)
Germany

German support for small business has kept its economy thriving as the rest of Europe languishes in recession

Although Germany is best known for giants such as BMW, Siemens and BASF, its smaller firms — many of them often family run — are the economy's driving force.

Editor's note: As Germans prepare for parliamentary elections later this month, senior correspondent Paul Ames made a 900-mile roadtrip across all 16 German states to take the measure of Europe’s most influential country. This is the third in his five-part series.

WERTHEIM AM MAIN, Germany — Tourists disembarking from luxurious Amsterdam-to-Budapest river cruises may not believe Wertheim is a global industrial powerhouse.

There are no billowing smokestacks, no smog or rumble of heavy machinery.

Instead, the pretty little town on the river Main wows visitors with its romantic hilltop castle and cobbled streets lined with colorful cafes offering kaffee und kuchen, and the crisp local white wine.

Head a couple of miles down river, however, and you discover Germany's greatest concentration of world-beating businesses.

Clustered in a bend of the Main and facing a forested Bavarian hillside on the far bank are row upon row of neat, clean factory buildings, mostly run by the kind of small-to-medium-sized companies that form the linchpin of Germany's economy.

Their success explains why Germany has thrived while most of Europe languishes in recession.

"We are looking for the best possible quality," says Werner Scheuermann, product manager at Koening & Meyer, the leading global manufacturer of music stands.

"We only use the best material and everybody in the music market knows that," Scheurermann says as he strides across the factory floor. "This is the reason for our success, we are the quality leader in the music industry — like Rolls Royce in the car industry."

Although Germany is best known for giants such as BMW, Siemens and BASF, its smaller firms — many of them often family run — are the economy's driving force.

Collectively known as the mittelstand, they make up 98 percent of Germany's exporting companies and employ two-thirds of the workforce.

"These innovative and internationally competitive firms that we call the mittelstand are extremely important," says Ferdinand Fichtner, head of forecasting and economic policy at the German Institute for Economic Research in Berlin. "It's not only for export industries but for the German economy in general. It is the backbone of the economy."

Wertheim, a city of just 24,000 people, boasts 11 companies designated as global leaders in their sectors.

What they produce isn’t sexy on the whole. Wertheim-based companies are world-beaters in laboratory glassware, screen printers and industrial communication systems. Dominance of global niches by those so-called "hidden champions" is vital to Germany's economic ascendency.

Behind the factory doors, the reasons for their success are clear: a winning combination of high technology and old-fashioned craftsmanship.

In the alfi vacuum container factory, state-of-the-art robotics are used to mold metal discs into the distinctive shape of pots that used to keep coffee hot on hotel breakfast tables around the world. Nearby, skilled polishers burnish their chromium, silver or golden shine by hand.

One of German industry’s strengths is an apprenticeship system that combines on-the-job training with classroom education. It gives youngsters hands-on experience and skills. Apprentices spend time working in all departments of their companies, developing an overview of their needs and building team spirit.

"Young people come here directly from school," says Alexander Schmitt, sales director at alfi, which employs 180 people making a range of vacuum flasks and carafes.

"They stay with the company for three years, and they go to school one to two days a week. They learn how to prepare products, they learn how to deal with administration. They really see the big picture. This is something really important in Germany."

Down the road at K&M, school kids as young as 15 spend up to three weeks on production lines during their summer vacations to get a taste of work.

"Almost everyone here started out on the apprenticeship program, including the directors" says President Martin Koenig, whose father founded the company in 1949. "That's one of the reasons for our success. We don't have a lot of turnover of staff. People are trained here and keep their skills and experience in the company, they stay for 30 or 40 years."

Mittelstand companies take pride in their non-confrontational labor relations. Workers are consulted on major decisions and ideas exchanged between factory floors and boardrooms. "We have successes together and we have losses together, Schmitt says. "That’s something that we try to grow ourselves, being a family."

When Germany was hit by the

http://www.globalpost.com/dispatch/news/regions/europe/germany/130910/germany-mittelstand-economy-merkel-elections

Eva 8 months ago
The German State Treasury thriving! The German tax office robbed my money! We had 16 people 21 thousands euro in a year earned. Now robbed from me alone 16 thousand should I pay to pay for the tax office for Detmold!