sion.) Some flee abroad, for example trans- forming themselves into a British plc. Günzburger Steigtechnik, a maker of ladders in Bavaria, has more than 350 sta ff but no works council. Employees are in- volved in big decisions, insists Ferdinand Munk, the boss, whose family has owned and run it for four generations. The com- pany pays attention to workers’ special needs—such as organising an employee’s shift around the care of his ailing wife— without badgering by a works council. A formal structure, Mr Munk thinks, would only slow things down. He says that co-de- termination is “actually counterproduc- tive” in an age where speed and nimble- ness are of the essence. Mario Ohoven, head of the Mittelstand association, calls it “out of date”. Most employers concede that co-deter- mination played a constructive role in the decades after the war. But times have changed. The world is overtaking German corporate giants. Only one, sap , a software- maker, is among the world’s 100 biggest companies. Apple’s $1.4trn market value is roughly that of the entire dax 30. Co-deter- mination may not be the sole reason. Euro- pean countries which do not embrace it hardly do better. But as cars go electric and manufacturing goes digital, German in- dustry faces drastic restructuring—includ- ing of its biggest companies’ vast work- forces. Bosses who agree with Mr Ohoven will be ever less timid to say so. 7
The Economist February 1st 2020 Business 59 1 I n its quest to “accelerate the world’s transition to sustainable energy” Tesla is di ff erent to other carmakers. Their mission is less to change the planet and more to make and sell as many cars as possible. De- spite its technological lead in electric cars, Tesla has struggled with the mundane task of mass-producing vehicles. Of late, how- ever, the firm has started to hit production targets. It is even turning a profit. That such milestones seem modest by car-industry standards has not stopped investors from swooning. Tesla’s market capitalisation surpassed $100bn in January and is now only exceeded by one other carmaker, Toyota, a Japanese giant. It is worth more than Germany’s Volkswagen, which made more than 10m cars last year, 30 times as many as Tesla. It has lapped premium ri- vals like bmw (with a market value of $47.5bn) and Daimler ($51.2bn). The latest indication that Tesla is at last making an impression as a manufacturer came with its fourth-quarter results, un- veiled on January 29th. After years of losses the firm made an operating profit—of $359m—for the second quarter in succes- sion (though it still lost money for the year). Its boss, Elon Musk, was uncharac- teristically restrained but noted revenues in 2019 of nearly $20bn without spending cash on advertising. Earlier in the month Tesla also revealed delivery numbers that pleased analysts and seemed to show that the firm has put behind it what Mr Musk had called “production hell” around the Model 3, its first mass-market car.
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