The cost of hiring has become too high. Confronted by fierce competition, many companies say they can no longer afford the costs of doing business in Germany. Household names such as Siemens and Daimler-Benz have fired thousands of workers in Germany and moved production to countries where taxes and labor costs are much lower. As an example, Hoechst, Germany's leading chemical company, has cut the number of workers at home to 45,000 from 80,000 and has moved much of its production abroad. The irony is that the strategy works to a great extent.
German products have a good name and continue to sell well abroad when the price is right.
So the official figures show that German exports are booming. But that does not help the job situation at home. But the trade unions are reluctant to accept that changes, such as the moderation of wage demands, are unavoidable if new jobs are to be created. In wage negotiations, some unions still push for increases of up to 7 percent. And changes intended to provide more jobs are often seen as an opportunity for new wage demands.