A week ago having ‘Made in Germany’ on a manufactured product meant most customers were willing to pay a considerable premium over a more bog standard, often Chinese, similar product. Not just their cars but their washing machines, printing presses and machine tools were all regarded as a cut above. Germany meant quality worth paying for. We cannot be sure that still applies today.
The blow that has been dealt an economy reliant on manufacturing expensive things and selling them - as opposed to chucking up Thames riverside flats and flogging them to dodgy Malaysians and cash-hiding Russians - might well be considerable. It could, of course, blow over in due course but some reputational repair will be in order.
The VW scandal is a disaster. Think about the long years the company has spent nurturing the US market with its quirky Beetle ads from Doyle Dane Bernbach during the 60s. The Love Bug, anyone? That’s all been utterly trashed. Anyone tooling around in a diesel is almost certainly now looking at its residual value falling off a cliff. VW - along with most other European manufacturers - bet the farm on diesel.
The oddity of what’s occurred is that it seems so out of character for the Germans. For all their faults - and we shouldn’t go into these too deeply without dredging up age-old prejudice - Germans were thought to be plain dealers. If and when it all comes out it’s going to be interesting to see where the heart of the blame lies.
German manufacturing is traditionally ruled by engineers with their austere, lean, no-nonsense precision. It took a manager to tell the engineers to devise a system that would deviously switch from a filthy noxious emissions spewing system to a purer version when it went on the testing bed. Why they felt forced into this deception is the most interesting - and as yet unanswered - question. Were the emissions limits just beyond what they could design? Did commercial pressure to out-perform hybrid rivals push them so completely over the line between gamesmanship and cheating? Like all little white fibs - and great big technicolour lies - you’ll get found out in the end. Especially with the Euro-hating EPA sniffing around you.
I know a little about Germans. My gap year between school and university was spent in Germany. With no jobs on the Merc production line going free and even rejected by McDonald's, the only job I could find was in the Dekorationsabteilung of the Freiburg branch of Hertie, as a department store shop window-dressing assistant. (Probably not the sort of position I was born to hold.) I wasn't actually allowed into the window space: Germany being Germany, you're required to have a PhD in Shop Window Design to enter this hallowed ground.
When I got home famished from a hard day dragging naked mannequins around the store room and telling customers I couldn't sell them any underwear because I wasn't in sales, supper was a meagre ration of cold meats and rye bread. No lashings of steaming wurst with cabbage, washed down with an elegant Riesling or a schwabische beer.
The family I lodged with were well-to-do academics and they were kind to me, but they ran a tight, orderly ship. Alles in ordnung. In the evening, we all watched dismal German TV, the monotony occasionally broken by Bosco, the boxer dog, silently breaking wind as he slept by the fire. And the family Merc had done a couple of hundred thousand miles.
Germans are precise and they are frugal. Although relatively well off compared with other Europeans, they do not splash money around and rarely go on borrowing sprees to buy things they haven't saved up for.
However, they were shown in Michael Lewis’s Boomerang to be such unsuspecting dupes when it came to buying crap, packaged sub-prime mortgage debt that the devilishly cunning American investment bank salespeople took them to the cleaners. (Nobody has been flushed out by the American authorities to pay the price for this crime.) But it’s down to their caution when it comes to borrowing that they didn’t get so deeply in schtuck as the Brits, the Irish, the Spanish and the Greeks when the crash came.
Well, now it turns out that they’re quite frugal with the truth, as well. Yet another mess for the remarkable Frau Merkel to add to her lengthy list of things to sort out.