How to set your Continent on Fire, Listen to Europe

Last week I mentioned that it is quite hypocritical for people clad in Chinese clothes and buying most of their products from China to single out Apple for manufacturing in the country. After all, if you are upset Chinese working conditions and jobs being relocated there you could and should equally go after Wal-Mart and virtually every company in the world in conjunction with Cupertino.

No sooner had I penned this piece – someone sent me news titled: Deutsche Telekom Union Workers and Member of German Parliament to Visit US, to Call on German Company to Stop Mistreating U.S. Workers. The basic premise is the German workers at Deutsche Telecom are treated better than US workers. A quote from the release is as follows: “As a whole, DT workers in Germany are treated far better than DT employees in the U.S. In Germany, workers sit on the board of DT, they are free to form a union, and have a meaningful voice in the workplace. In the U.S. efforts to organize at T-Mobile USA (a subsidiary of DT) are met with hostility and threats.”

Let’s put these comments into perspective.

First off, T-Mobile USA is not doing very well – many analysts say it won’t be able to make it on its own. How does it make sense to take a company which is doing poorly and moreover is forced to compete on price as it doesn’t have access to the best devices and make them increase their costs?

Quick answer – it doesn’t – unless the goal here is to bankrupt the company forcing the workers with jobs onto government assistance.

Let’s continue down this path a little bit. The idea here seems to be to make this hybrid German/American company more like Europe than the US. Sure, AT&T and Verizon have unions but that is in-part because each of these companies once was a monopoly and could easily handle the additional financial burden of becoming unionized.

To some degree they still are a very strong duopoly.

Basically, over the years, you and me as customers of these carriers have been forced to accept higher prices to pay for union benefits – not having tremendous choice with our home, office and now wireless phone service.

In the 1980s in fact, the phone company even charged companies to light the lights on their phones which corresponded to an active telephone line. You dared not protest.

But in the US, T-Mobile USA has no monopoly or pricing power whatsoever. So increased prices can’t be passed on which of course leads to insolvency.

Speaking of insolvency, has anyone looked lately at Europe and specifically Greece lately? Here we have country which embraces the European philosophy of strong unions and lots of vacations. And guess what? As a result, the country, the continent and much of the world is sinking.

Last year, the stock markets around the globe tanked repeatedly because the European business philosophy is unsustainable. Greece, Ireland, Portugal, Italy and Spain are all in various stages of trouble relating to running up too much debt due to high labor costs, bloated bureaucracies and doing business the European way – which often includes some of the most generous vacation day policies on the planet.

Germany by far is the strongest country in the EU but the reality is the German strength is a house of cards. At least it is to some degree. I love my German car and the country makes awesome products – but the ones made in the US are great as well.

Speaking of the US, it spends obscene amounts of money on its military and this money benefits not just US citizens but all of NATO – including Europe and Germany. The Germans don’t have to worry much about defense because the US is here to back them up as needed. Likewise for the rest of Europe. This is hundreds of billions of cost they don’t have.

So Germany coming to the US to lecture us about how to treat workers and what benefits and vacations they need is pretty silly.

But Germany’s advantages don’t stop there. Remember that Europe has a common currency meaning that a country like Greece can afford to buy very-high priced German goods because its currency isn’t able to depreciate.

Since the Greeks no longer use a drachma they don’t have the ability to devalue their currency when they have excess debt or are near default. Default and/or devaluation has been chosen by many countries in the past few decades such as Greece, Mexico and Argentina. Put more simply, a Greek citizen who could afford a Volkswagen can take advantage of continent-wide currency manipulation called the euro to afford a BMW.

This is why Germany isn’t really a bunch of suckers for bailing Germany out, this system really benefits their manufacturing and they need an edge to be able to keep all those high-paying union jobs.

While we are on the topic, this currency manipulation causes double the pain for the US as it is more difficult for us to export to Europe because France and Germany will always have an advantage when selling to a weaker country. Moreover, the financial shocks which seem to come every few days out of Europe are destroying the ability for companies in the US to plan for the long-term.

And now, we have Europe coming to the US to tell us how to run things. It is quite mind-boggling.

These are the details of today’s activities in case you are interested:

Monday, February 20th, 2012 – Washington, D.C.


10:00 AM        Roundtable with T-Mobile USA employees

Presentation: Organizing at T-Mobile in the U.S./The War at the Workplace

                        CWA Headquarters

                        501 3rd St, NW Washington D.C. 20001


2:00 PM           Leafleting at T-Mobile Store

                        1850 K St NW
                        Washington, D.C. 20005

The CWA was invited to post a counterpoint to this piece and/or provide quotes with their perspective. They declined. If they change their mind, I will be sure to pass along their rebuttal/counterpoint.

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