Recent Globalization Issues Raised in Germany

by Olivia Hunt - Date: 2007-03-16 - Word Count: 718 Share This!

Presently one of the major issues of Germany is the global economy that undergoes great changes. The challenges of globalization raise new questions that must be solved. With the emergence of new economic powers the world economy and the economic power of Germany is changing giving new opportunities and challenges in the working sector.

Since 1970s Germany has shown a stable currency and as a result - a strong economic growth. Besides, Germany has united a competitive market economy with partnership with other countries that became an important fact of economic prosperity and stability. However, globalization brings new changes in the economic life of this country challenging all the achievements. Nowadays globalization demands more flexibility changing the global economy and the economy of every state. Competition at the global market is becoming more intensive and severe bringing new task to companies and, thus, to people.

In general, Germany is a stable country with a tradition of low inflation, goof industry and high employment level. However, there are structural changes in the labor market, shifts in the production and employment. All these changes are not caused by globalization as it just intensifies already existing problems. Wages in German are high in comparison to other countries that make German companies use every opportunity to hire workers abroad putting pressures on German employment sector.

Nowadays globalization has reached a new level in its development. Its influence poses a threat to the Germany industry as Germany companies place their manufacturing and production lines abroad. Thus, the label 'Made in Germany' becomes an urgent advertisement pattern problem and the number of working is dropping rapidly. Germany, a country famous for its car manufacturers and engineers, does not have essential base within the country. For example, Volkswagen Company is going to reduce the number of working places in the native country or, as alternative, to reduce the salary amount. This question is raised due to the coming job cut at Opel Company owned by General Motors.

While large car companies continue working, smaller companies does not meet the global competition and disappear. In general, there is a tendency in the German industry in companies' reduction due to high competitive conditions. Nearly every week one company announces its closing while the plants of large companies are built abroad in low-salary states. There is the only result of such 'changes' - unemployment at the native country.

Germany, being one of the leaders in exporting goods, for instance, cars, faces the challenge of its doubtful status exporting jobs abroad. Besides, Siemens employ more workers abroad than at home. As a result, some people in Germany are left without work and some people are ready to work at a lower wage in order to maintain the working place.

Companies need help to give more working places in a native country. Government stays powerless as a matter of course while people are afraid of losing their job places. In Germany the situation with working places is really serious. Since 1995 companies cut the staff or about 500 working places every day. Since that year German people started feeling the negative influence of globalization on their every day life.

Nowadays the situation is becoming even worse threatening to reduce much more working places as even small companies follow the example of larger companies - they place the manufacturing lines abroad, for example, in Ukraine, India and China. This way companies hire cheap workers saving money.

According to a research, almost 87% of Germany's construction companies are going to place their production parts abroad. Outsourcing seems to German companies a good way out of the present situation. Almost 50% of car companies are placing the production line abroad. The situation will become even worse as the rest part of companies is just going to follow this example and will expand the international centers. Thus, about 1 million working places will disappear that will lead to a high percent of unemployment within Germany.

Summarizing, globalization brings many challenges to Germany and other developed countries. It is inevitable process that affects every country. The impact of globalization can be positive or negative giving new challenges to Germany Companies. It is very likely that globalization will have both positive and negative effects on Germany industry. The purpose of Volkswagen, Opel and other companies is to reduce negative effects of globalization and use it as an opportunity.

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