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The corrosive effect of misallocated inherited wealth. For context, BMW's biggest shareholders are the Quandt/Klatten family. Through the entire supply chain,

The corrosive effect of misallocated inherited wealth. For context, BMW's biggest shareholders are the Quandt/Klatten family. Through the entire supply chain, hundreds of thousands of jobs and massive impact on the wider economy, electrification, competitive effects in the energy market, and climate change, all depending on a handful of people. People who (in this particular context) have no particular motivation for..really anything, with virtually infinite inherited wealth. Especially not to rock the boat or drive any vision forward. That, in a nutshell, is why Germany's car industry is dying long-term. VW ownership same thing via Porsche SE. I find this incredibly interesting, how entire economies ultimately lag and long-term may fail on the bottleneck of a few randomly selected people. Interestingly, there seems to be no good way out because disowning individuals for the collective good is a path that historically does not tend to work well for innovation either.

theredbox 7y ago
That could be said about anything really. The Chinese companies will inevitably fail because they will never venture outside of china in any meaningful way that would be sustainable for them. The Zaibatsus will fail because of aging population and traditionalism. The Chaebols will fail because of archaic hierarchy of the korean society.
- high_derivative 7y ago
  I am sorry but I am not following. What can be said about anything? That it will fail for some reason? Fine, but what does that have to do with the particular point of the ownership structures of German car makers?
  - theredbox 7y ago
    They way i understood your comment is that the german car makers will fail because of inherited wealth. I am saying all of them can fail due to cultural differences. It just happens that the american can do attitude works the best and is global or tries to be global.
  - majormajor 7y ago
    Everything will fail, so why not instead of trying to keep particular instances alive as long as possible, optimize the system to be less shocked when any single piece fails? In my mind, this means dis-incentivizing scale. Replace 10000 people dependent on one entity with 10 entities each dependent on 1000. Get rid of mergers and vertical integration and fight accumulated wealth..?
    - LifeLiverTransp 7y ago
      To be honest, the new generation of cars already destroys the sub-contractor culture the car companies used to squeeze manunfactoring costs down. Even the german mail company was able to build there own e-delivery truck, so there is that.
cagenut 7y ago
its remarkably similar to the method through which a memory leak drags down a running operating system.
rb808 7y ago
>The corrosive effect of misallocated inherited wealth. For context, BMW's biggest shareholders are the Quandt/Klatten family. I dont know where you got that opinion from. BMW is perhaps Europe's most successful & profitable car company, probably second most successful globally after Toyota. > That, in a nutshell, is why Germany's car industry is dying long-term. VW ownership same thing via Porsche SE. The first company that will be dying soon is Tesla.
- Xixi 7y ago
  Expected top 10 electric car makers in 2019 (in no particular order): Tesla, Nissan, Renault, Hyundai, and 6 Chinese brands that I don't know [1]. Where are the German carmakers? The latest EU elections have seen an unprecedented rise of the Greens at the European level, so I expect regulation against greenhouse gases to go only one way: more taxes on gas, more regulations, more choking of the ICE car market. German carmakers need to get their act together or they will die of irrelevance. [1] https://cleantechnica.com/2019/02/18/top-10-best-selling-fully-electric-vehicle-brands-in-2019/ https://cleantechnica.com/2019/02/18/top-10-best-selling-ful...
  - Fins 7y ago
    This mayu or may not portend the end of Germany's auto industry, but what exactly is the marketshare of electric vehicles globally, and would BMW or Mercedes really notice what Hyundai or Nissan are doing?
    - Xixi 7y ago
      The market share is small, but my point is that it will converge to 100% within one to two decades, with increasing pressure to move that deadline to the left. Maybe not globally, but at least in some markets (China, India, EU). In the transition some will win and some will lose. So far the German automakers have not looked at this drastic market shift seriously... It needs to change if they want to stay relevant.
      - 7y ago
subroutine 7y ago
When you say "disowning individuals" can I assume you're referring to something like setting very high rates for inheritance tax? Why do you think high inheritance tax 'historically does not tend to work well for innovation'?
- high_derivative 7y ago
  I should clarify, I think there are a lot of good reasons for high inheritance taxes if reasonably structured. I meant disowning people who are still alive in a communist sense (do not want to start a discussion on socialism/communism though), i.e. the government literally deciding someone is not fit to own such a big piece of the means of production and taking it from them.
stefan_ 7y ago
I find myself agreeing, but you could write the exact same comment about public companies only optimizing their business towards making the numbers look good for the quarterly report. Tesla famously does its end-of-quarter push knowing fully well that a number of those cars will be bought back from customers next quarter.. Ultimately, I think the shareholders of Tesla influence company strategy as much as Klatten et al, which is not very much at all. It's the people at the top.
ulfw 7y ago
And chasing quarterly numbers instead of making long-term investments has been killing the US auto industry. Your argument is very one-sided.
Thorrez 7y ago
If the shares of BMW were evenly spread across the German population, would it have been any better? That would be about $500 of stock per person. Do people who currently hold $500 of BMW stock put much effort into following shareholder votes and such?
sam_lowry_ 7y ago
Soviet economy boomed between 1924 and 1970, bar the war losses.
- deleted 7y ago
  [deleted]

theredbox 7y ago

That could be said about anything really. The Chinese companies will inevitably fail because they will never venture outside of china in any meaningful way that would be sustainable for them. The Zaibatsus will fail because of aging population and traditionalism. The Chaebols will fail because of archaic hierarchy of the korean society.

high_derivative 7y ago
I am sorry but I am not following. What can be said about anything? That it will fail for some reason? Fine, but what does that have to do with the particular point of the ownership structures of German car makers?
- theredbox 7y ago
  They way i understood your comment is that the german car makers will fail because of inherited wealth. I am saying all of them can fail due to cultural differences. It just happens that the american can do attitude works the best and is global or tries to be global.
- majormajor 7y ago
  Everything will fail, so why not instead of trying to keep particular instances alive as long as possible, optimize the system to be less shocked when any single piece fails? In my mind, this means dis-incentivizing scale. Replace 10000 people dependent on one entity with 10 entities each dependent on 1000. Get rid of mergers and vertical integration and fight accumulated wealth..?
  - LifeLiverTransp 7y ago
    To be honest, the new generation of cars already destroys the sub-contractor culture the car companies used to squeeze manunfactoring costs down. Even the german mail company was able to build there own e-delivery truck, so there is that.

cagenut 7y ago

its remarkably similar to the method through which a memory leak drags down a running operating system.

rb808 7y ago

>The corrosive effect of misallocated inherited wealth. For context, BMW's biggest shareholders are the Quandt/Klatten family. I dont know where you got that opinion from. BMW is perhaps Europe's most successful & profitable car company, probably second most successful globally after Toyota. > That, in a nutshell, is why Germany's car industry is dying long-term. VW ownership same thing via Porsche SE. The first company that will be dying soon is Tesla.

Xixi 7y ago
Expected top 10 electric car makers in 2019 (in no particular order): Tesla, Nissan, Renault, Hyundai, and 6 Chinese brands that I don't know [1]. Where are the German carmakers? The latest EU elections have seen an unprecedented rise of the Greens at the European level, so I expect regulation against greenhouse gases to go only one way: more taxes on gas, more regulations, more choking of the ICE car market. German carmakers need to get their act together or they will die of irrelevance. [1] https://cleantechnica.com/2019/02/18/top-10-best-selling-fully-electric-vehicle-brands-in-2019/ https://cleantechnica.com/2019/02/18/top-10-best-selling-ful...
- Fins 7y ago
  This mayu or may not portend the end of Germany's auto industry, but what exactly is the marketshare of electric vehicles globally, and would BMW or Mercedes really notice what Hyundai or Nissan are doing?
  - Xixi 7y ago
    The market share is small, but my point is that it will converge to 100% within one to two decades, with increasing pressure to move that deadline to the left. Maybe not globally, but at least in some markets (China, India, EU). In the transition some will win and some will lose. So far the German automakers have not looked at this drastic market shift seriously... It needs to change if they want to stay relevant.
    - 7y ago

subroutine 7y ago

When you say "disowning individuals" can I assume you're referring to something like setting very high rates for inheritance tax? Why do you think high inheritance tax 'historically does not tend to work well for innovation'?

high_derivative 7y ago
I should clarify, I think there are a lot of good reasons for high inheritance taxes if reasonably structured. I meant disowning people who are still alive in a communist sense (do not want to start a discussion on socialism/communism though), i.e. the government literally deciding someone is not fit to own such a big piece of the means of production and taking it from them.

stefan_ 7y ago

I find myself agreeing, but you could write the exact same comment about public companies only optimizing their business towards making the numbers look good for the quarterly report. Tesla famously does its end-of-quarter push knowing fully well that a number of those cars will be bought back from customers next quarter.. Ultimately, I think the shareholders of Tesla influence company strategy as much as Klatten et al, which is not very much at all. It's the people at the top.

ulfw 7y ago

And chasing quarterly numbers instead of making long-term investments has been killing the US auto industry. Your argument is very one-sided.

Thorrez 7y ago

If the shares of BMW were evenly spread across the German population, would it have been any better? That would be about $500 of stock per person. Do people who currently hold $500 of BMW stock put much effort into following shareholder votes and such?

sam_lowry_ 7y ago

Soviet economy boomed between 1924 and 1970, bar the war losses.

deleted 7y ago
[deleted]