Studio Guest: Gerhard Bosch, labor market expert

Gerhard Bosch is professor for sociology at the University of Duisburg-Essen and Head of the Institute for Work, Skills and Training. DW-TV: What's your take on Kramski's solution: high-end golf clubs instead of spare parts for the car industry. Is this a way to survive the current crisis? Gerhard Bosch: I think there are enough producers for golf clubs, it's a small market. But what is important is that you have to be innovative and to have new ideas to invent new products and this is one of the strengths of the German machine building industry. 75 percent of the German companies in this industry sell products that they developed last year. So they are very innovative more than the other industries in Europe. DW-TV: Still they do have to deal with one of the worst crises in the last eighty, ninety years. The engineering sector experienced a huge slump in orders since June 2008, which hit its lowest point so far in April 2009 with a 58% drop in orders. Over the same period, German exports have also slowed significantly and the engineering sector is largely dependent on exports. So the question is as long as global demand remains sluggish, how can the engineering sector get back on its feet? Gerhard Bosch: It will never get back on its feet if the global economy is so sluggish. The German machine-building industry is dependent on sound economic development in the world especially in those countries who are demanding German investment goods, like China, India, South America, but also the United States of course. DW-TV: So is it healthy to be that dependent on exports, is there no other way round it? Gerhard Bosch: I think there are no ways around it for this industry because this industry is highly specialized so they have to find niches in the world market, but what's true is that the German economy as a whole is too dependent on exports. We have to develop our internal demand for consumption for example. Our wages didn't increase sufficiently in the last decade, so we don't have enough internal demand. DW-TV: Well in order to increase internal demand, you need to have jobs and some experts say now that in this industry some 50,000 jobs are at stake. How can they be saved? Gerhard Bosch: We have about one million people working in this industry. About 50,000 have already been dismissed, but you won't find them in the statistics because they're temporary agency workers and there are another 20 to 40,000 jobs which are endangered. What is important is that this industry keeps its skilled workers because this is an industry which relies on its skilled workers and the short time scheme of the German government helps reduce salary costs for the companies. (Interview: Monika Jones)

DW-World | September 1, 2009

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