1 May 2011

This is a day that will be historic in nature for Germans, and Austrians.  This enormous gate will open up and Poles will have the chance to cross the border...legally, and seek employment.  Up until that date....Poles had to have paperwork and they tended to "sneak" in and work quietly.  They might work for weeks...maybe even months...until the Zollamt arrived to ask for papers.

So there's curious situation which will occur next summer as roofers, plumbers and electricians start to come over legally.  There's going to be this competitive state of affairs...and some Germans are going to face competition that they haven't seen in years.

But there's another side to this whole game.  Germany readily admits they've got a shortage of engineers and technicians.  There's also this shortage of nurses.

The Polish government, based on media reports, isn't worried about this upcoming shift in employment or a possible brain-drain.

I might lean toward the Polish attitude.  If you were heading up a Polish school with a bunch of fourteen year-old kids who show promise, then I'd hint everyday of engineering type jobs in Germany.  The Polish kid would strive to stay ahead and in eight years...know that he's got a decent job with real pay.  This might be the best incentive situation that you could ever offer smart kids.  On the negative side?  One out of every two kids might one day be exiting over to Germany for a highly technical job.

So stand by for 1 May next year.  It might be a pretty dynamic day that the German media misses entirely.  

Good Times Ahead?

There's a statistic which is a bold indicator of good economic times in Germany, but most folks have no appreciation for it.  It's tractor trailer rig sales.  If you went to a small operation and asked the operations guy how to tell if business is improving....he'd eventually say something to the effect that everyone wants to trade in their rigs and get new trucks.

A Bloomberg Report note came out today.....for the month of August....there was a 54 percent increase in big truck sales.....up to 3,812 units last month.

Course, it's not yet the best moment to admit the German economy is in full bloom....but there sure are some positive indicators to say that.

People get this way because they can sense a change and they've got contracts in their hand which look awful positive over the next twelve months.

Hartz IV to Basisgeld?

Various newspapers are reporting in Germany today that the term "Hartz IV" will be transformed.

The welfare program term has become derogatory since invented in 2002. This reinvented welfare program from the 2005-period is used daily by the news media throughout Germany and usually represents a negative story (against the government).

Everyone felt by the late 1990s that welfare was becoming an actual occupation and people were getting a substantial amount of money live a fairly good lifestyle. No one felt the system could sustain itself in the long run. So it had to be changed. Hartz IV become this chopping block where you got the basic necessities of life and that was the end of the deal.

The new name? They are bouncing this name of "Basisgeld" (basic money). This isn't final yet and still has to pass via a vote. I'm pretty sure it'll be a 100 percent vote...well...except for the Greens.

In five years...Basisgeld will also have a mean or ugly feeling to it, and it'll change again. That's the tendency of these events.

Trains and Buses

A couple of years ago...Wal-Mart came to Germany and felt it could "compete". It discovered about three years into this experience that Germany has stringent rules about competition and their vision of competition was considered unhealthy and illegal. They eventually decided their business model would not take off and give them the potential they enjoy in the US.

Today, via the New York Times, we learned that a long-standing anti-competition rule has finally been tossed. Sometime in 2011, you will be able to climb on a bus in Munich and actually end up in another German city....like Stuttgart or Heidelberg.

Yes, for almost eight decades...you just couldn't travel a long-distance within German borders via a bus, unless it was a tour. You could travel from Frankfurt to Paris. You could travel from Stuttgart to Amsterdam. But getting from one German city to another, just wasn't possible.

This was a protection deal for the Bahn folks. The train network made sure they had no competition. In the 1950s as air travel did finally occur, the Bahn folks couldn't say much. But the bus folks never could get the government to change the rule for them. It was a stupid rule by all accounts.

What'll happen now? Well...it's a curious thing. The Bahn could come up and match prices against the bus companies. For a short term strategy, this is likely the best possible direction for the Bahn. But the bus companies will be able to offer some dynamic changes for folks that the Bahn can't match, like picking up a load of thirty passengers in some smaller dead-end town like Kaiserslautern or Trier, and delivering into the heart of the Frankfurt shopping district in just eighty minutes. The Bahn can't deliver that precisely.

Added to this are the worker rides. Imagine a morning bus route that hits five smaller towns about sixty miles away from Mainz and it delivers folks to the nearest trolley car connection for the city. Guys could leave the car at home and pay 150 Euro a month for this direct run to their job in the big city.

My prediction is that the Bahn will realize that it doesn't have the upper hand to this deal, and the majority of these bus routes will end up being profitable. For the little guy with enough money to buy two buses and able to start a run from a rural area to a major shopping area....this might be a great investment opportunity.

The Stuttgart Mess

I blogged a piece a few weeks ago about the Stuttgart train station renovation....a ten-year project that would go into the billions. At that point, it was starting. In the past couple of weeks since the start....it's been an almost daily routine with protesters. We aren't talking about dozens or hundreds....it's into the thousands on a daily basis.

The Stuttgart political leadership never anticipated this type of reaction to the project. Over this past weekend....at least 65k people met and protested.

There's talk of the political leadership trying to arrange for meetings this week with the head protesters and trying to get agreements. Based on several newspapers and what they write, I'd say there's virtually no agreement possible. It's almost a comical opera now....in terms of the public perceptions of the project.

Today, the police finally came forward and said all these protests since day one....are wearing out the effectiveness of the local force. They want reinforcements. Added to this mess, the local cops still have to protect folks at the local soccer games and cover the local nuclear power plant. On a average night at the soccer stadium, there's well over four hundred cops involved in that detail for five hours of work.

The Stuttgart 21 project is massive. It'll cover eighteen brand-new bridges being built, and three city train stations being erected. And then you've got well over fifty miles of track that have to be laid in newly created tunnels throughout the entire city.

If you stand back and add up man-hours on this police episode and multiply by ten years, then you've likely spent an additional five hundred million on extra cops and protection throughout the entire period. The city might end up with the largest police force of any city in Germany. The amusing side of this is that it doesn't relate to crime, and cops are being pulled from regular patrols and law enforcement, to play games with the Stuttgart 21 protesters.

I don't see much positive action on this episode. It's going to be a long ten year period.

End of a Generation?

If you have ten minutes and an interest in green energy or wind mills....you might want to wander over to the British Telegraph. There's a fascinating story today.

The story relates to wind mills and Denmark. It appears that interest in building more windmills in the country....has finally peaked.

I've blogged this on a number of occasions...having traveled across Europe and seen the various issues up close.

If you can find an open area....miles away from civilization or cattle....windmills would readily thrive and multiply. The problem is that they put out a low-frequency noise. Any windmill within a mile of a village or home....disturbs people on a minute-by-minute basis. The experts now realize that you've got to put windmills out far away from civilization or people....to make this work.

While the story mainly describes Denmark's peak.....I would suspect the same issue for Germany. You can drive through central Germany on any afternoon and see dozens of windmills. The vast majority are all within a mile or two of some village. In the past couple of years after learning their lessons....most villages will now forbid any windmill construction near their town.

An eventual peak in Germany? I suspect that the "anti" crowd will eventually generate enough support and make it difficult to put a windmill anywhere. The ones currently in operation? I suspect if any lie within a mile or so of a village....they've got maybe a decade of operation left in them....before the locals chase them out. The ones in more remote locations will survive on.

That Luther Guy

Lets say you corner a German in a bar and you ask them to name the ten most significant Germans ever. It's a discussion topic that will shock an American in the end.

The German will pause and settle back in his seat. He'll sit and calculate for a minute or two. Then he'll lead off.

At least five of these guys will be political figures. The first guy will always be Konrad Adenauer, the first chancellor after World War II. Everyone has this enormous respect for the guy and what had to be done in those days. He acted presidential and you can't find a single person to today to ever criticize anything this guy ever did.

Then Helmet Schmidt will be mentioned. For Germans....this guy is the Holy Grail of leaders. You can take him into a room and announce some colossal emergency and he goes into action and gives orders like a drill sergeant. He leads people to an end purpose. It's been twenty-five years since he wrapped up his chancellor duties and folks still view him today as an absolute legend. This is the guy that you can view today....in his eighties....who chain-smokes and still runs through two packs a day (my guess). He can still walk into a hotel or building where smoking is illegal and light-up....and not a person will ever say a word. He commands respect.

Then you've got Helmet Kohl who ran Germany for sixteen years and his glitter disappeared by the end. Most Germans still have this positive attitude about the guy. Some will openly criticize him for staying too long and probably becoming somewhat corrupted at the end.

For the fourth and fifth positions...it'll be toss-ups. There's Green Party folks like Petra Kelly or Joschka Fischer. There's your friendly Bavarian political boss....Franz Josef Strauss. Erich Honecker might be mentioned....even if he was the East German boss at the end as the wall collapsed.

Around the sixth spot will always be Ludwig II...the crazy Bavarian king who built the dream castle. He captures the mind and creativity of Germans. Bavarians still have this mythical view of the guy.

By the seventh and eighth position, you come to Richard Wagner or Bach or Beethoven. At least two will always be mentioned.

The ninth? Franz Beckenbauer typically gets mentioned. Der Kaiser. Most Americans would laugh that a soccer coach would rate into the top ten. Remember, this is a regular German at a pub....and they would have this view of the Kaiser holding the crown jewels of German attitude and vision on the field. If the Kaiser says something...it's typically worth remembering....that's what a German would say.

Then we come to the tenth man. The shocker here is that it's a religious figure who has been dead for four-hundred and fifty-odd years. Martin Luther. Most Americans can't envision how anyone would equate a religious figure to a top ten position. Germans have this different view of his achievements, and it lives on today.

If you put yourself in 1500's Germany....it's a country of have's and have-not's. Out of a hundred men, five have something to own, and ninety-five are just surviving. Somewhere in the midst of this daily existence for both....is the Catholic Church.

The church held power over the Kings, the Princes, the Lords, and even the little guys at the end of the line. The church had this franchise-like mentality. They wanted to come into every community and build up a church. And in significant towns....they wanted a cathedral. The difference between a church and a cathedral in today's world? It's like comparing a two-story mom & pop storefront, and then a Super Wal-Mart. Cost became this huge factor in the construction of every single cathedral.

So if you were a Bishop somewhere....to move up the food chain ladder....you needed to build cathedrals. Kings, Princes and Lords had this pocket of money....and the Catholic Church went after as much as they could get....but this wasn't enough. So this scheme was hatched to go after the little guy and his money.

The deal was simple....you create these sermons where sin was going to forbid you entry into heaven. The little guy was stupid enough to believe the deal....and then you offer up this special letter which was stamped, and it'd suggest that you were sin-free as of the date it was "sold".

For this one priest who was close to having a nervous breakdown because of his seriousness nature into religion....this smacked of a commercial nature. The comical thing was that the special letter would be sold on one week....and within a month....the local church bosses would convince you that new sins had been committed....so you'd need a whole new letter stamped. More cash would be involved.

Martin Luther becomes this magnet for trouble. He won't sit by and just let this happen.

An internal battle within the leadership of what exists in Germany in the 1500s now starts to emerge. In the end, the mighty Catholic Church emerges as the loser. This mythical character of a simple priest that stood up....now becomes a legend that endears to even this day.

It was a battle between good and evil, as far as most Germans see it.

So a simple priest from 450-odd years ago, ends up as the tenth man that most Germans would put on their list.

The End of a German Company?

To tell this story...I need to introduce the chief player....Beate Uhse.

For an American, you've likely never heard of the company. It's on the German stock market and up until a few years ago....was making money. It's the "Sears" of German sex shops.

Typically, if you walk into a Beate Uhse shop....it's a medium sized shop that features just about every item that you could dream up. Their reputation is based on being the friendly shop where either a guy or gal could walk in....with any weird taste, and find exactly what they need. Complimenting this...was their catalog effort.

For a number of years...they had built up a very organized business and actually have a great business reputation for what they actually sell.

But things in the last couple of years have gone downward, and they are reaching a point where profits are difficult to maintain, and they are searching for some way to soar back to the top. This leads us to their latest idea....announced today....3-D adult movies.

In the video market....Beate Uhse was actually getting three-quarters of his business from video sales when you go back over a decade ago. Today...it's just under twenty percent of their business. They are thinking this 3-D interest in the past year...will be a curious thing in the adult community.

I pondered over this idea. Twenty years ago...this might have been accepted. People still went to theaters. There really aren't 3-D TV's yet, and if you do find them....it's way more than the average German would ever pay. But this trend to run down to an adult theater to see 3-D? It just won't happen.

My prediction here is that Beate Uhse is on its last legs. It'll spend the money to make this one last big effort...and maybe produce a dozen of these videos....and then watch the banks close its operation. It'll take a year or two after the first release but this is likely a company that is coming to an end.

A buyer for it? Why? It's not a business where number two's really exist. You've got a bunch of small market Italian, Spanish or French guys who can probably step in sell their wares....and thats about the best you can see develop.