WAKE UP CALL An American Problem With Germany

Donald Trump may be shaking things up in the United States, but a new survey shows U.S. companies are feeling uncertain about Germany as a business location, too.
Americans aren't quite so convinced things are running well in Germany. Picture source: dpa

German companies have spent much of the past year worrying about their prospects in the United States under President Donald Trump. Apparently, at least some of the feeling is mutual.

Companies in the United States are looking at Germany with worry when it comes to choosing a quality business location, a survey conducted by the American Chamber of Commerce in Germany (AmCham Germany) and the consulting company Roland Berger showed.

Thirty-four subsidiaries of U.S. companies with a total of 150,000 employees in Germany were surveyed. Only 9 percent of respondents said they expect conditions to improve in the coming years, while 24 percent expect things to get worse. In particular, the U.S. companies said they were worried about the state of Germany’s digital infrastructure as well as rising energy costs.

"This must be a wake-up call," said chamber President Bernhard Mattes. "Especially for energy and labor costs, we have to find solutions, as well as for company taxation."

It was not all bad news, however, in the chamber’s 14th annual survey.

“As in previous years, Germany’s highly qualified labor force continues to rank the number one reason why American companies are happy about investing in Germany,” said Rob Smith, vice president of AmCham Germany. The country’s strong supply base and research and development capabilities were also highly valued by American companies, he added.

The chamber’s members were confident that 2017 would be a good business year, Dr. Smith said, adding that he hoped the new German government, which is expected to be formed after the elections in September 2017, would focus on promoting free and fair international and bilateral trade.

In the wake of Brexit, Frankfurt has been a suitor for multinationals and financial services potentially looking for a new home in a post-London European Union. Officers at Deutsche Bank said this week that it was considering moving as many as 2,000 staff from the United Kingdom, and others such as Goldman Sachs, Citigroup and UBS are also expected to scale down their London offices and expand into Germany.

Germany faces some infrastructure concerns that could stymie that process. The government’s plan to supply all citizens with access to broadband internet by the end of 2018 has been criticized for its slow pace. At an average of 13.7 megabits per second, Germany’s internet speed still lags behind that of many other European countries.


Stuart Tiffen is an editor at Handelsblatt Global. To contact the author: [email protected]