3 ms·

I guess it depends on where you would draw the line with respect to what still constitutes "Mittelstand", but in the small-town circles where my family operated

I guess it depends on where you would draw the line with respect to what still constitutes "Mittelstand", but in the small-town circles where my family operated our company, outsourcing wasn't really a thing. Most of the companies were around 30 to 3000 employees, and mostly operated B2B for the automotive industry. There was exactly one company which got overly ambitious and started to emit shares. It was a big deal back in the 90s, SHARES! From our hometown! Like, you could watch it in the Ticker in the evening news if you waited long enough! But they quickly faltered when the golden 90s turned into the permanent state of crisis beginning in the 2000s. Most of the others were still family-owned, including our own (electroplating, ~130 employees), and stuck it out much longer. But we've since had to close doors, too, as have most of the others. It's a combination of things. Regulations have you in a chokehold, you can't get decent employees, and every process input from energy to equipment to real estate related costs and whatnot just cost an arm and a leg and slowly bleed you dry. Nobody here ever flew business class (except maybe these flashy idiots with their shares). The families always re-invested.

clarionbell 2mo ago
This seriously needs to be repeated again and again. It's not that Mittelstand got greedy. Neither did most other small and medium companies in Europe and US. They gradually became less competitive by overregulation, high input costs, and complete lack of state support. The last sometimes bordering on hostility.
- RandomLensman 2mo ago
  There has been at least indirect state support for some by support for the automotive industry. They might have gotten squeezed as a supplier but the ecosystem got help to keep moving.
- avhception 2mo ago
  Anecdote time re: Over-regulation: We had a side-hustle, automatic sorting machines. Mostly nuts and bolts, but other stuff, too. About 10 employees. By some miracle, it managed to survive the loss of it's biggest customer (the aforementioned electroplating company). But we had to move shop. After we got a place, the city terminated the operating permit for the building. Why? Because, you see, the company that operated the building before had it filed as "metal working", so that is what the permit said. But _sorting_ metal doesn't alter it, so the permit doesn't hold! And they wouldn't issue a new one. Fun times.
  - sassbadger 2mo ago
    Honestly, in my view it's not an issue of overregulation but a malfunctioning administrative apparatus. Too much power is concentrated in the hands of few administrators who can interpret the law according to their own vibes, leaving businesses with few options of recourse without resorting to spending money on lawyers. It's the mideval mindset in the local administration that makes it so difficult, not the regulations per se. The is a really eye opening interview with Marco Scheel from the small German company Nordwolle, where he describes the daily struggle with German administratives: https://dts.podtrac.com/redirect.mp3/files.lagedernation.org/lagedernation/LdN465.mp3?ptm_source=feed&ptm_context=mp3&ptm_file=LdN465.mp3 https://dts.podtrac.com/redirect.mp3/files.lagedernation.org...
    - close04 2mo ago
      Sadly even eliminating all bureaucracy isn't the Holy Grail of saving the local workshop. The company has to pay German level taxes, the workers have to pay German cost of living, and most business owners also want to enjoy the fruit of their labor and that fruit in Germany usually wears a Porsche badge. These are the obvious and "easy" ones but probably not the most important ones. The difficult problems are the entire ecosystems, supply chains, and tight integration that are just on very different levels between Germany and China. Every part of the supply chain has to be optimized or else it eats into the margins. China is a beast at "extreme supply chain micro-optimization". It would take decades to build equivalent ecosystems elsewhere, and in the meantime implement artificial barriers to keep China less competitive on Western markets. This is true for all of Europe and the Western world at least. This video [1] highlights just how big a gap there is between China and everyone else. [1] https://www.youtube.com/shorts/h7McXnWRCQY https://www.youtube.com/shorts/h7McXnWRCQY
      - pjmlp 2mo ago
        Agreed, however there are only two ways to handle this, race to the bottom and then everyone has Chinese working conditions and salaries, or it is about time that we build our walls and kind of, no kidding, make each country great again, which is why right wing parties are going up all over the place. I still remember how it was in most European companies before we started offshoring everything, textil, shoes, TVs, mobiles, software,..., the whole bunch, with the colonist mindset that of course the "slaves" would never have the skills to master the end to end production themselves, what a joke, naturally as humans they have exactly the same skills. And it isn't only China of course, we even do it among ourselves across European countries, for the new factory in some random eastern country, a bunch of folks in western Europe join the job center line. All for the bank accounts for the managers of course, as employees get thrown around like pawns in the MBA chess, more akin to mediaeval lords managing their feudal servants.

clarionbell 2mo ago

This seriously needs to be repeated again and again. It's not that Mittelstand got greedy. Neither did most other small and medium companies in Europe and US. They gradually became less competitive by overregulation, high input costs, and complete lack of state support. The last sometimes bordering on hostility.

RandomLensman 2mo ago
There has been at least indirect state support for some by support for the automotive industry. They might have gotten squeezed as a supplier but the ecosystem got help to keep moving.
avhception 2mo ago
Anecdote time re: Over-regulation: We had a side-hustle, automatic sorting machines. Mostly nuts and bolts, but other stuff, too. About 10 employees. By some miracle, it managed to survive the loss of it's biggest customer (the aforementioned electroplating company). But we had to move shop. After we got a place, the city terminated the operating permit for the building. Why? Because, you see, the company that operated the building before had it filed as "metal working", so that is what the permit said. But _sorting_ metal doesn't alter it, so the permit doesn't hold! And they wouldn't issue a new one. Fun times.
- sassbadger 2mo ago
  Honestly, in my view it's not an issue of overregulation but a malfunctioning administrative apparatus. Too much power is concentrated in the hands of few administrators who can interpret the law according to their own vibes, leaving businesses with few options of recourse without resorting to spending money on lawyers. It's the mideval mindset in the local administration that makes it so difficult, not the regulations per se. The is a really eye opening interview with Marco Scheel from the small German company Nordwolle, where he describes the daily struggle with German administratives: https://dts.podtrac.com/redirect.mp3/files.lagedernation.org/lagedernation/LdN465.mp3?ptm_source=feed&ptm_context=mp3&ptm_file=LdN465.mp3 https://dts.podtrac.com/redirect.mp3/files.lagedernation.org...
  - close04 2mo ago
    Sadly even eliminating all bureaucracy isn't the Holy Grail of saving the local workshop. The company has to pay German level taxes, the workers have to pay German cost of living, and most business owners also want to enjoy the fruit of their labor and that fruit in Germany usually wears a Porsche badge. These are the obvious and "easy" ones but probably not the most important ones. The difficult problems are the entire ecosystems, supply chains, and tight integration that are just on very different levels between Germany and China. Every part of the supply chain has to be optimized or else it eats into the margins. China is a beast at "extreme supply chain micro-optimization". It would take decades to build equivalent ecosystems elsewhere, and in the meantime implement artificial barriers to keep China less competitive on Western markets. This is true for all of Europe and the Western world at least. This video [1] highlights just how big a gap there is between China and everyone else. [1] https://www.youtube.com/shorts/h7McXnWRCQY https://www.youtube.com/shorts/h7McXnWRCQY
    - pjmlp 2mo ago
      Agreed, however there are only two ways to handle this, race to the bottom and then everyone has Chinese working conditions and salaries, or it is about time that we build our walls and kind of, no kidding, make each country great again, which is why right wing parties are going up all over the place. I still remember how it was in most European companies before we started offshoring everything, textil, shoes, TVs, mobiles, software,..., the whole bunch, with the colonist mindset that of course the "slaves" would never have the skills to master the end to end production themselves, what a joke, naturally as humans they have exactly the same skills. And it isn't only China of course, we even do it among ourselves across European countries, for the new factory in some random eastern country, a bunch of folks in western Europe join the job center line. All for the bank accounts for the managers of course, as employees get thrown around like pawns in the MBA chess, more akin to mediaeval lords managing their feudal servants.