Cutting room

Cutting room - Germany sheds its factory overalls - but union protocols persist; trains that are the pride of Hull; loaded issue for cash machine operators ... Evan Davis at large.

by EVAN DAVIS, economics editor of the BBC
Last Updated: 31 Aug 2010

Germany sheds its factory overalls - but union protocols persist; trains that are the pride of Hull; loaded issue for cash machine operators ... Evan Davis at large.

It has been a month of touring industrial landscapes. Or, more accurately, post-industrial landscapes. First, to Germany. Have you ever been to Oberhausen, a mining-and-metal town in the Ruhr district? I wouldn't recommend it as a tourist destination, but I went there nevertheless to uncover the mystery of why Germany's economy is doing so badly at the moment.

One theory is that its failure to move out of old industries explains its recent sluggish growth. About 30% of the German economy is industrial, compared to about 25% in Britain.

And Germany's strength in manufacturing may be its economic weakness. There is global overcapacity in many manufactured sectors, and manufacturing prices are falling. In Britain, the price of manufactured goods has gone down by 1% since 1996, while that of services have gone up by 25%. Profits in manufacturing in Britain and the US are hopelessly low. Could all this be why the German economy, which is so manufacturing-oriented, is feeling the pain?

Well, it might be. But Oberhausen didn't give that impression. Sure, it was once an industrial town, but it seems to be losing its old industry about as fast as the North of England under Margaret Thatcher. For example, the old gasometer on the edge of town is now a spectacular visitor attraction (you can go inside and on top, and at night it's decked out in blue lights). And the old Thyssen steelworks is now a spanking new retail park, with a Warner Village cinema and a kilometre-long strip of American-type fast food chains attached.

So here's my theory. Germany's lacklustre performance is down to its reliance on old industries that are becoming less attractive. But it's also down to the fact that, contrary to the usual perception, Germany is adapting out of those industries, and that process is intensifying all the pain.

As if watching a city de-industrialise was not enough of a nostalgia trip back to 1980s Britain, we saw a telling scene in Oberhausen. Before filming at a large bankrupt engineering company that is in the midst of being salvaged, we arranged with a friendly employee to show him at work on camera. We arrived just as the lunch break started, but he happily carried on working for a few minutes. To my amazement, there were frowns from his colleagues and murmurings about him getting into trouble with the union for working during the break.

It's like those old British tales of workers being told not to work too fast, lest their colleagues were adjudged to be slacking. It's not exactly an advertisement for that harmonious German industrial relations system.

From Oberhausen to Hull. I caught a late train up there last week - and discovered a positive manifestation of rail privatisation. It's called Hull Trains, one of the smaller train operators.

It's not an original rail franchisee but was allowed to enter service in competition with GNER. Its unique selling point is that it runs direct services between London and Hull, a metropolis of more than 250,000 people that had somehow been bypassed by the big train companies.

The most appealing thing about Hull Trains (slogan: 'We love our trains, we know you will too') is that it employs only about 40 people and seems to have generated a fair bit of civic pride in the city. Glancing at the free in-train magazine to keep myself occupied on the journey, I saw a photo of the company's marketing manager and then realised he was standing a few feet away from me, hanging out with the buffet staff. The enterprise seems a bit more familial than British Rail or its big successors. Without intending to get too pompous, I feel a quote from Edmund Burke coming on: 'To love the little platoon we belong to in society, is the first principle (the germ as it were) of public affections' (from Reflections on the Revolution in France, 1790).

Maybe we'd all be happier if capitalism delivered more little platoons, rather than huge, impersonal corporate bureaucracies.

One last reflection. In Hull, a taxi across town costs maybe #5; a decent restaurant meal costs #10; a reasonable hotel costs #45 a night. Yet when you draw money out of a cash machine, it offers the same denominations as in the south-east amounts right up to #200. It seems to me that #200 would go a long way in Hull. Are the people who decide on those cash-machine denominations a bit London-centric or what?

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