Last week’s Annual Economic Forum provided an interesting insight into what continues to be a complex, and challenging economic situation. As in years past, the German American Chambers of Commerce, in conjunction with the Representative of German Industry and Trade organized a panel of experts, including two renowned economists, one from Germany and one from the United States, to deliver an in-depth analysis of the economy in the new year. This analysis was complemented by insiders’ accounts of the current condition of two major German players in the US-market, Continental Tire of North America and Deutsche Telekom, as seen by their respective CEOs.
Prior to the economic debate, Prof. Dr. Hans Heinrich Driftmann, Chairman of the German Association of Chambers of Industry and Commerce (DIHK) and General and Managing Partner at Peter Koelln KGaA, pointed out in his keynote speech that the economic recovery on the horizon is not enough to fully overcome the effects of the crisis. He called on transatlantic trade partners to take responsibility for rehabilitating public trust in the free market economy: “Globalization and open markets are not the cause of the crisis. On the contrary, globalization and open markets are part of its solution.”
Voices on the economy
Both economists, Prof. Dr. Joachim Scheide of the Kiel Institute for the World Economy and Diane Swonk of Mesirow Financial, agreed that the recent economic recovery is largely due to extensive government intervention around the globe. While supporting the policy initiatives, they pointed out that new setbacks will have to be expected once stimulus funds, such as when the “Cash for Clunkers” program ran out. With regard to fragile consumer confidence and the lingering danger of a credit crunch on both sides of the Atlantic, Scheide and Swonk caution that it is too early to rely on a continuous and consumer-driven recovery.
On the micro-economic end, Matthias Schoenberg of Continental Tire and Klaus-Peter Statz of Deutsche Telekom conveyed growing, albeit cautious, optimism. Although both companies experienced significant sales drops in 2008 and 2009, and have a continuing problem with the high consumer savings rate, they both have found ways of accommodating these challenges. By shifting parts of its tire production operations to the United States, Continental Tire has gained the flexibility to react to shifts in demand and currency fluctuations between Europe and the Americas more quickly. Additionally, Continental Tire has found the time to tweak its product portfolio and take advantage of unusually inexpensive marketing opportunities. Deutsche Telekom, currently employing a total of 38,000 people in its US operations, is continuing its investment strategy into 2010, despite muted expectations regarding the consumer market. Both these responses are in line with the results of a brief survey forum attendees filled out prior to the event, which indicated that 61% of respondents expect German investment into the US market to rise.
The German American Chambers of Commerce (GACCs) in Atlanta, Chicago, Houston, New York, Philadelphia and San Francisco all work together under the network of AHK USA. With approximately 2,500 members and an extensive national and international business network, the GACCs offer a broad spectrum of activities and services. news@ahk-usa.com, www.ahk-usa.com
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