Daily Management Review

3 German giants that lost their fame


06/06/2019


Germany has long been a symbol of developed industry, successful companies and efficient business. However, recently the situation has begun to change, and not for the better.



Tony Webster
Tony Webster
Germany's large concerns are going through difficult times. This makes analysts think about whether this is a coincidence or a system failure. In any case, what is happening indicates that there are certain problems in the country's economy. Below we describe the 3 major concerns of Germany, which have lost their former strength.

Volkswagen

Volkswagen is one of the largest automakers in the world. The group consists of 342 companies engaged in production of cars and related services.

Volkswagen AG owns 48 carmakers in 15 countries in Europe and in six countries in America, Asia and Africa. The group employs over 370 thousand people, produces more than 26,600 vehicles daily, and authorized sales and service of vehicles is carried out in more than 150 countries around the world.

Recently, however, its position has significantly deteriorated in connection with the so-called “Dieselgate”, a scandal of 2015. It turned out that more than 11 million diesel cars around the world were equipped with software that  underestimated the amount of harmful gases during the tests.

The scandal resulted in resignation of the automaker's chairman Martin Winterkorn. He was replaced by the director of Porsche, Matthias Müller. A number of other key figures was forced to leave as well: there were Heinz-Jakob Neußer, Head of Volkswagen research and development, Ulrich Hackenberg, head of Audi’s technical development and Wolfgang Hatz, Head of research and development at Porsche.

The scandal with underestimation of environmental harm from diesel engines has affected not only the Volkswagen Group itself, but also the entire global automotive industry as a whole.

Thus, similar checks were carried out by other German automakers, first of all, Daimler and BMW. They revealed a number of violations (albeit much less significant) by these automakers, which also did not contribute to growth of their sales.

Deutsche Bank

Deutsche Bank plays a key role in the German economy. This is the largest bank in the country with thousands of divisions and tens of thousands of employees. Moreover, the bank owns a significant share in the largest companies in Germany, in particular, a third of Daimler's shares belong to the bank.

In May 2007, Deutsche Bank shares reached a historic high of over $ 150 per share. And then came the financial crisis, which seriously hit the bank. The US Senate recognized the bank as one of the main culprits of the crisis, since Deutsche Bank imposed garbage bonds worth billions of dollars to investors.

The bank’s shares fell to $ 20 in early 2009. However, it soon managed to recover. By the end of the year, the stock price had risen to $ 70. After that, instead of continuing to grow or remain at the same level, stocks began to decline to $ 6 today. This happened in connection with a number of bad decisions taken by the bank management, including changes in structure and a failed merger with Commerzbank.

Recently, the bank has found itself at the center of Trump’s numerous requests for the bank’s financial activities. According to the publication The New York Times, Donald Trump has a long history of relations with Deutsche Bank. This is the only financial institution that was ready to conduct business with him after a series of defaults, due to which other creditors suffered heavy losses.

In 2016, the German edition of Spiegel Online published a great material on researching the bank’s problems of the bank. Since then, bank shares have fallen by 50%.

Bayer

Bayer AG is a German chemical and pharmaceutical company. The group includes over 350 companies in all countries of the world. The number of staff reaches 106.2 thousand employees.

In June 2018, Bayer completed takeover of American Agrochemical Corporation Monsanto. Nevertheless, purchase of Monsanto brought many problems to the German concern, since lawsuits are regularly brought against the “most hated company of the world”.

After the takeover of Monsanto by Bayer in 2018, the proceedings and loss of reputation became a serious problem for the German company. In recent years, Monsanto products have increasingly become the subject of lawsuits, there were more than 13 thousand lawsuits with similar accusations of cancer in people who used the Roundup herbicide filed in the United States.

source: reuters.com, bloomberg.com






Science & Technology

China's first solar power molten salt plant sets record

WSJ announces imminent start of Boeing 737 MAX flight tests

Study: Machine learning is five times more harmful for the environment than a car

Would Singapore Be The First One To Bring Lab Grown Shrimps To The Global Market?

Apple Patents A ‘Foldable Screen’ For Creating Foldable iPhones

Research Shows Air Pollution Causing Birth Defects

Microsoft tells about operating system of the future

Study: Third of US kids wake up at night to check their smartphones

Deepfake AI Technology Used By Researchers To Bring Mona Lisa ‘To Life'

China is developing technology to capture greenhouse gases

World Politics

World & Politics

Former UEFA President detained to testify in a corruption case

Iranian Foreign Minister urges other countries to abandon the dollar

The EC recommends starting penalty procedure against Italy

European Breweries To Up Their Brewing Innovation Amid Green Legislations

‘Frequent’ Shootings Causes China To Issue Travel Advisory Against US To Its Citizens

Facebook’s appeal to stop ECJ data case rejected in Irish Supreme Court

Trump: Japan to buy 105 F-35 fighters from the USA

Theresa May to resign on June 7