Full throttle: How the US Celebrated 70 Years of Porsche Sports Cars US and Germany Auto Market Both Set For Major Sustainability Changes - German ...
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Q U A R T E R L Y
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Vol. 30 N o.1 $7. 50
Full throttle:
How the US Celebrated
70 Years of Porsche Sports Cars
US and Germany Auto
Market Both Set For Major
Sustainability Changes
GO WEST!
with the new GACC office
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E D I T O R I A L C O N T E N T S
I t’s great to be back in the US and
having rejoined the strong network
of the GACC offices. The German
nC OV E R S T O R Y
Full throttle: How the US Celebrated
American Chambers wrap up the year 70 Years of Porsche Sports Cars 4
with many highlights: We opened the
new Representative of German nECONOMIST’S C O R N E R
Business office in San Francisco, Choppy Waters Ahead? 11
celebrated the GACC South 40th
anniversary in Atlanta and kicked off nS P O T L I G H T S
Wunderbar Together events across the GO WEST! with the new GACC office 8
United States to honor the long-
The Five Essentials for Getting Maximum
standing ties between Germany and
Value out of Digital Supply Chains 12
the US. We also welcomed Dr. Emily
Haber as our new German Ambassa- US and Germany Auto Market Both Set
dor to the United States. For Major Sustainability Changes 14
Kristian Wolf GACC Supports 25th Anniversary of The
On the West Coast, we are proud to be CEO & President Alliance for International Exchange 17
amongst the German Chambers of Representative of German Business
Commerce Abroad’s newest offices Wunderbar Together: The 2018 German
around the globe. The investment of chains. The next year will show how American Business Awards 18
our parent organization DIHK and of the new tariffs impact the business
the German Ministry of Trade and climate in the U.S. and the results of nG TA I I N D U S T R Y T A L K
Energy (BMWi) to strengthen the this year’s German American Business
German Machine Exports to US Rising 22
San Francisco office is also a signal Outlook (GABO) will give us a clearer
to the growing importance of digitali- picture of how German subsidiaries in nWA S H I N G T O N U P D A T E
zation, especially for the German the United States view their growth
US Midterm Elections: Changes Are
Mittelstand. While facilitating bilateral prospects for 2019. The GACCs and the
trade will always be the primary focus Representative of German Trade (RGIT) Coming to Washington 26
of our organization, we will need to in Washington will continue to be an
pay more attention to emerging advocate and outspoken voice for open nMEMBER PROFILES
disruptors to the industries that we and fair trade. Quintet Partners 28
count as the pillars of our economy. In
Silicon Valley we continue to see a We look forward to seeing many of nSKILLS AT WORK
constant stream of German companies you at our kick-off event (GABO to be Honoring the best and brightest for the
to open new innovation outposts, held in New York on January 29) for future: The GACC Apprenticeship Awards 30
acquire promising start ups and a deep dive into the business senti-
New Jersey Takes Decisive Step to
expand their R&D by tapping into the ment for 2019 together with our
local innovation ecosystem. We are partner KPMG. Implement Dual Education Programs 32
past the often quoted “innovation
theatre”. Companies are now focused Lastly, on behalf of all our GACC nWHAT'S ON YOUR DESK?
on Silicon Valley ventures to produce colleagues around the United States, Anna Kraft,
tangible outcomes. I wish you and your families, Manager, Events & Communications 34
loved ones, staff and communities a
Looking at the entire nation’s economy great start into 2019. nE V E N T C A L E N D A R
in 2018, it’s noticeable that financial
Events & Delegations: Q1 2019 36
markets remained strong and histori-
cally low unemployment has contin-
ued to lift consumer sentiment.
However, anxieties have increased
with growing trade tensions. The All the best,
uncertain trade environment is starting Kristian Wolf
to weigh on companies, many of CEO & President
which rely on complex global supply Representative of German Business
C O V E R S T O R Y
Full throttle:
How the US Celebrated
70 Years of Porsche Sports Cars
2018 has been a special year for Porsche.
Not only because it marked the legendary
T he anniversary events kicked off
in February when “The Porsche
Effect” opened at the Petersen
Automotive Museum in Los
brand’s 70th anniversary as a sports Angeles. "What we see is one of the
car manufacturer, but also because of most significant collections of our
sports cars and display artifacts
the celebrations around the milestone. outside of the Porsche Museum in
Stuttgart," Klaus Zellmer, President
All year, Porsche enthusiasts have been gathering for and CEO of Porsche Cars North
festivities across the US – a market inextricably America, Inc. (PCNA), told guests at
the kick-off gala. Prior to the public
linked to the company’s global success. opening, the museum also hosted a
Panel discussion at the opening of “The Porsche Effect” exhibition, Petersen Automotive Museum, Los Angeles
4 German American Trade Q1 2019
C O V E R S T O R Y
curated panel discussion moderated
by racecar driver Tommy Kendall.
to see this unique exhibit until
April 2019.
Throughout an
The panelists included three-time anniversary year
24 Hours of Le Mans and five-time Then, June 8 marked an important
Rolex 24 Hours at Daytona winner moment in the calendar for every and across the
Hurley Haywood, actor Patrick
Dempsey, producer and multiple
Porsche enthusiast. On that day, in
1948, the 356 “No. 1” Roadster
nation, auto
Pikes Peak International Hill Climb received its official street enthusiasts have
winner Jeff Zwart, entertainer Spike certification and the Porsche sports
Feresten and Hollywood legend car was born. Birthdays call for a put the pedal
Steve McQueen's son Chad. A
recent extension of “The Porsche
party, which is why Porsche Cars
North America joined with its 190
to the metal.
Effect” means there is now a chance dealer partners to create the first
Sportscar Together Day at the Porsche Experience Center Atlanta
German American Trade Q1 2019 5
C O V E R S T O R Y
ever Sportscar Together Day. trends with a large-scale new audiences, a goal for every
Porsche dealers nationwide hosted commitment to consumer immersion premium automaker. About 60
events that weekend to celebrate the at its two PECs, where anybody over percent of PEC visitors do not
thrill of Porsche sports cars, and age 25 with a valid driver’s license currently own a Porsche, but after
there was also a full house at the can touch rubber to the track driving the tracks, 30 percent of
Porsche Experience Centers in instead of just touching a screen. non-owners say they are very likely
Atlanta and L.A. “A quarter of a million guests so to buy one. Truly, the PECs have
far is a testament to the power of become a new chapter in the brand’s
The US is the only country with two experience and to the fascination of American success story.
Porsche Experience Centers, and Porsche sports cars,” said PCNA’s
they reached a milestone of their Klaus Zellmer. “Getting people Another of those chapters was
own in August when they topped a behind the wheel in a place where written at the end of September
combined 250,000 visitors since they can really test the performance with the world’s largest gathering of
opening in Atlanta in 2015 and LA is the best way to connect them Porsche cars and enthusiasts:
in 2016. The Experience Centers with the Porsche brand.” Rennsport Reunion VI (RRVI). This
represent the value of physical major event took place at
experiences in a digital age. The visitor numbers prove that the WeatherTech Raceway Laguna Seca
Increasingly, it can be hard to get Experience Centers have established near Monterey, California, and the
the touch and feel of a product themselves as destinations for location was no coincidence.
when everything is online or automotive enthusiasts, but they California and Porsche is a love
automated. Porsche is bucking those also work as a way to connect with story that goes back to the 1950s,
Sportscar Together Day at the Porsche Experience Center Los Angeles
6 German American Trade Q1 2019
C O V E R S T O R Y
when auto enthusiast Johnny von The festival also featured car Porsche sports car. At the same
Neumann bought a Porsche 356 reveals, autograph sessions, on- time, another car on display at
from the Max Hoffman dealership in stage interviews, concerts, and Rennsport pointed towards the
New York and drove it cross- various meet-and-greets with future of the brand. The Concept
country to the Golden State. Fast legendary drivers, including Study Mission E is the vision of
forward to today and Porsche Haywood, Derek Bell, and Jacky what a fully electric Porsche sports
vehicle sales in California have Ickx, and factory drivers, including car might look like. This summer,
accounted for approximately 25 919 Hybrid Evo driver Timo the vision received a name: the
percent of total sales in the US for Bernhard, bringing the “Marque of Porsche Taycan. Next year, the
the last 17 years. Champions” theme to life. vision becomes reality. The Taycan
will be a true Porsche, equally
It was in this context that Rennsport Rennsport was the culmination of thrilling to behold and to drive.
drew a record 81,550 enthusiasts this year’s global celebrations of the As they say, “There is no substitute”
during four days of historic racing 70th anniversary, including the - on to the next 70 years then.
and car culture Sept. 27-30. The original 356 “No. 1” Roadster taking
sixth iteration of a Porsche “family to the track. As if that wasn’t For More Information:
reunion” saw champions and enough, it was piloted by none
Porsche Cars North America, Inc.
contenders from 70 years of Porsche other than Dr. Wolfgang Porsche,
>> press.porsche.com
Motorsport roaring around the track Chairman of the Supervisory Board
Porsche Experience Centers
while around 2,500 vehicles from of Porsche AG and son of Ferdinand
>> porschedriving.com
past and present were on display. “Ferry” Porsche, who built the first
Concept Study Mission E
German American Trade Q1 2019 7
S P O T L I G H T S
GO WEST!
with the new GACC office
The Gold Rush of the digital age is driving
modern pioneers on the American West Coast
I n the 19th century, in a quest to
find a brighter future, settlers were
pushing westward along the Califor-
new opportunities. While California
boasts the world’s 5th largest
economy by GDP, they are drawn to
German corporates have already
invested heavily in this region to scout
new technologies, develop new digital
nia trail to explore and settle the land the Silicon Valley for its unique products and be part of the ecosystem,
from coast to coast. What was once symbiotic relationship between rather than just observing from afar.
called the American Frontier became entrepreneurs, world-renowned In a world of exponential technologi-
a symbol of leaving the old structures research institutes & universities, cal growth, it is a distinct competitive
behind and finding life-changing accelerators, incubators, venture advantage to understand how to
opportunities in the new world. This capitalists as well as technology combine the strengths of German
still holds true 200 years later, as the giants like Google, Apple and Intel. engineering led innovation with the
American West Coast continues to This ecosystem fuels more than fast-paced nature of Silicon Valley.
attract modern pioneers, bringing 60,000 startups at any given time,
their ideas & passion to this hotbed including more than 70 Unicorns - Innovation goes beyond
of global innovation. startups valued at at least one billion Silicon Valley on the US
USD. Young private companies in the West Coast
The Silicon Valley “Gold Rush” is Bay Area attract more than a quarter Disruptive startups are turning entire
also attracting an ever-increasing of the world's venture capital, industries upside down through
number of German companies who boosting the rapid growth needed to platform-based business models,
are looking to the West Coast for become the world’s leading disruptor. artificial intelligence and network
effects. Speed and scale are the key
and data is the gold of the digital era.
Traditional, engineering led industries
have understood that they will need
to adapt quickly to avoid being
caught off guard by the disruptive
forces emanating from Silicon Valley.
Beyond Silicon Valley other regions
like the Pacific Northwest, Southern
California, Arizona and Nevada are
also home to leading industry
clusters.
The new GACC office is
your partner for innovation
on the West Coast
On September 13, 2018, more than
150 guests celebrated the opening of
the 4th independent office of the Ger-
man American Chamber Network
(AHK USA). The Representative of
Key facts on U.S. West Coast Innovation Hubs German Business now joins Atlanta,
Chicago and New York to represent
8 German American Trade Q1 2019
S P O T L I G H T S
German American business interests nology experts, innovators, decision-
Kristian Wolf
across the Western US. makers and potential technology
partners as well as customers across
To symbolize “the Gold Rush” of the industries on the U.S. West Coast.
21st century for digitalization and Already before its independence, the
innovation, the office was inaugu- San Francisco office has successfully
rated with a virtual ribbon cutting hosted over 40 Silicon Valley
ceremony by Dr. Martin Wansleben, innovation programs for German
CEO of the Association of German stakeholders such as corporates,
Chambers of Commerce and Industry government, as well as trade and
(DIHK), Mr. Thomas Bareiß, Parlia- industry associations.
mentary State Secretary of the
German Federal Ministry of Econom- To help German companies to learn
ics, Prof. Dr. Andreas Pinkwart, State from Silicon Valley’s best practices
Minister for Economic Affairs, and to engage with the unique
Since April 2018 Kristian Wolf is
Digitization, Innovation and Energy ecosystem, the Representative of the CEO of the Representative of
State of North Rhine-Westphalia German Business created the new German Business. He has been part
(MWIDE), and Kristian Wolf, CEO of Innovation Solutions department. of the German Chambers of Com-
the Representative of German Together with expert staff and local merce Abroad (AHK) network for 17
years. In 2006, he became CEO of
Business. mentors this new department offers
the German American Chamber of
customized innovation consulting Commerce of the Southern United
This virtual ribbon cutting was just services, such as the InnovationCamp. States in Atlanta. In 2011, he moved
the beginning: the Representative of to Australia to lead the German
German Business will move into a InnovationCamp is a unique initia- Australian Chamber of Industry and
Commerce until March 2018.
new office in February 2019, more tive to enable companies from
than doubling its current footprint
and joining forces with other
German organizations: Germany
Trade and Invest (GTAI), Invest in
Bavaria, Representative Office for
Baden-Württemberg, the Northern
Germany Innovation Office, and the
Technical University of Munich
(TUM). To bring the German business
community even closer together
members are offered collaboration
space – to exchange best practices
and know-how while creating room
for more networking opportunities.
The Representative of German
Business offers German SMEs a The team of the Representative of German Business
unique network of industry and tech-
German American Trade Q1 2019 9
S P O T L I G H T S
Germany to take a deep dive into the company works on an individual
Silicon Valley’s ecosystem and drive innovation challenge with the Innovation Solutions for
German Companies - Your
product innovation. Baden-Württem- InnovationCamp team and a network
Partner for Innovation
berg was the first state to implement of Silicon Valley mentors, startups
this program for companies from and technology experts. The program Industry and company specific
their state. During a customized is funded by the Ministry of Eco- strategic foresights, innovation and
three-week program with high-level nomics, Labour and Housing startup scouting, as well as
mentors, participants learn about Baden-Württemberg and organized matchmaking
Silicon Valley approaches to custom- in partnership with Baden-Württem- entored programs on Silicon
M
er-centered product development and berg International. Valley approaches to digital
how to leverage new digital tech- product innovation, future of work
nologies and business models. Each One of the success stories is the and entrepreneurship
InnovationCamp BW participant omprehensive Silicon Valley
C
ZwickRoell, the world's leading Innovation Camps that combine
suppliers of materials testing both of the above to empower
machines. Through the Innovation- German companies to successfully
Camp process they identified a drive innovation scouting and
suitable partner to jointly start devel- innovation management on
oping a new product: a collaborative their own
robot (including a software platform)
S upport with opening an Innova-
which can insert material samples tion Outpost on the West Coast
into machines and thus save the
customer time and money. Valley’s entrepreneurial ecosystem to
create new products and services.
This is just one example of successful
innovation scouting combining With 2018 drawing to a close, the
Virtual Ribbon Cutting on September 13, 2018
German engineering with Silicon Representative of German Business is
looking ahead to growing the innova-
tion programs and host many German
delegations along the way. In addition,
the Representative of German Business
will focus on addressing pressing
societal issues, such as diversity.
Diversity in the workplace and
innovation go hand in hand. Accord-
ing to Forbes 55% of America’s
billion-dollar-startups have immigrant
founders and the recent walkout at
Google shows that the push for a more
inclusive and diverse workplace
culture offers a blueprint for what’s to
come - for the tech industry, corporate
America, and beyond.
What is your
innovation challenge?
We look forward to hearing
from you at:
Participants of the InnovationCamp BW visiting the Google campus >> info@gaccwest.com.
10 German American Trade Q1 2019E C O N O M I S T ’ S C O R N E R
Choppy
Waters Ahead?
I t is that time of the year again to
discuss the economic outlook for
the coming twelve months. Last year,
support factor will vanish. Fourth,
financial conditions will get some-
what tighter, reflecting a combina-
my bottom line was that “strong tion of higher interest rates, a
growth in 2018 could be the last stronger US-dollar and choppier
hurrah of the current expansion”. And equity markets. Lastly, global growth
boy, did we see a strong economy this is losing momentum, while at the
year. But I also continue to expect a same time trade tensions continue to
perceptible slowdown in 2019, as the escalate. Dr. Harm Bandholz, CFA
US economy is heading towards a – Chief U.S. Economist
mild – recession in 2020. All of these factors will contribute to UniCredit Research
the slowdown in growth and make >> harm.bandholz@unicredit.eu
Various factors are likely to contrib- the US economy more vulnerable to >> www.unicreditgroup.eu
ute to the slowdown. First and various shocks. One of the most likely
foremost, the support from the two candidates for such an adverse event
fiscal stimulus programs (the tax cut is the corporate sector, where balance
and the spending bill) will be sheets look increasingly stretched.
petering out. Second, the labor Corporate debt is at a record high, recession, you are in good company.
market will lose momentum, as labor and debt service ratios have risen The IMF acknowledged in its latest
supply is increasingly becoming a perceptibly in recent years even as World Economic Outlook that the
bottleneck. With the unemployment interest rates have stayed historically Fund itself, as well as private
rate below 4%, job gains can no low. Those vulnerabilities will become forecasters, have predicted a
longer outpace increases in the labor exposed when demand momentum “whopping” 5% of all recessions in
force. This, in combination with the and the support from the tax cuts advanced economies since 1991 and
fading impact of the tax cuts, will fade, and/or when interest rates and 2016.
weigh on household disposable spreads move higher. Profit margins
income gains and ultimately on of nonfinancial businesses have In 2019, the current expansion of the
consumer spending. Third, 80% of already been trending lower for some US economy is having its 10th
the acceleration in investment years now – only briefly interrupted anniversary, making it the country’s
growth since 2015 can be attributed by the tax cut. Historically, such a longest recovery on record. Celebra-
to the rise in commodity prices, slowdown in profit margins has tions, however, should be muted, as
notably in oil prices. As oil prices are reliably pointed to a recession. indications for a growth slowdown,
unlikely to accelerate at a similar and ultimately a downturn, will be
pace in the coming quarters, this If you are reluctant to forecast a mounting.
German American Trade Q1 2019 11S P O T L I G H T S
The Five Essentials for
Getting Maximum Value
out of Digital Supply Chains
Too many businesses are leaving money on the table because
they’re still using yesterday’s supply chain operating models.
Authors: Philipp v. Stietencron, Marc André Lüers, and Christian Bast
M any of today’s supply chains
are no longer fit for purpose.
In an increasingly digital world,
chain operating models must first be
transformed to realize the benefits of
these technologies. goetzpartners’
Further, as supply chain complexity
mounts, the importance of having the
right organizational structure increas-
many companies still rely on supply experience has found five building es. The supply chain can be organized
chain operating models and solutions blocks to provide the framework by products, regions, or customers but
introduced in the 1990s. necessary to ensure these operating the processes, metrics and governance
models can quickly jump the must reflect the goals of the supply
goetzpartners has identified the S-curve. chain. Decision-making should be
potential negative top and bottom efficient, and metrics should cascade
line impact of having an outdated 1. Redesigning the from overall objectives.
operating model – procurement costs Operating Model
20% higher than they could be, The transformation of a supply chain 2. Envisioning the
inventory costs 30% above what is operating model begins by defining End-to-End Value Stream
optimal today, and times-to-market where and how the most value-add- The company must define the
that are 30% slower than what is ing work is done and what capabili- customer value that the supply chain
possible in a digital age. ties are needed to drive it. Primarily, will provide, and the organizational
the value is defined by customers. setup must enable the delivery of that
Essentially, digital solutions are For example, if a business caters to value. As siloed structures slow the
jumping the S-curve while tradition- customers who are highly sensitive flow of information and the pace of
al supply chain operating models to price, adopting lean manufactur- decision-making, it is crucial to look
have yet to make that jump. Busi- ing approaches at scale can cut costs at the entire stream of activities as an
nesses can take advantage of significantly. But if customers’ needs end-to-end process. For example, in a
advanced analytics, new manufac- differ significantly across markets, consumer goods company, teams may
turing, logistics technologies and the supply chain must have a flexible work fully end-to-end and indepen-
increasingly integrated and intuitive decision-making process to enable dent within one specific product
software. However, their supply later stage differentiation. category, ensuring a tight and
integrated process from a product’s
proof of concept to delivery at the
1 point of sale.
OPERATING MODEL DESIGN
3. Moving from Data
to Action
3 2 4 Although today’s computing power
DATA-TO-DATA E2E VALUE STREAM CONFIGURATION PEOPLE & TECH
can analyze seemingly limitless data,
MANAGEMENT CAPABILITIES
most companies struggle to act on the
insights produced. The central
5 ECOSYSTEM MANAGEMENT challenge is the organization’s overall
approach to data, which too often nar-
12 German American Trade Q1 2019S P O T L I G H T S
rowly focuses on initiatives within a knowledge, necessary business Nobody likes to admit to lost opportu-
single function, missing out on the processes, and data analytics to nities. The good news is that all those
knowledge that could be gleaned from support effective decision-making. drawbacks can be resolved quite
data outside that function. The quickly. The five building blocks
greatest value of a well-constructed Concurrently, businesses must also get described will enable the supply chain
analytics initiative is the power to better at identifying and adopting the operating models to jump the S-curve.
make data-driven decisions by emerging technologies that will give Now is the right time to discuss how
analyzing multiple data sets and by them the highest advantage most to act on them.
bringing together fragmented points quickly. This applies across the supply
of customer knowledge. Best-in-class chain – on the manufacturing floor, in
analytics operations use a formal the planning office and in the logistics
data-to-management approach and hubs. Further, it is crucial to be able to
work iteratively with R&D, procure- pilot, launch and then rapidly scale
ment, and other supply chain func- those technologies for maximum goetzpartners is an independent
tions to maximize the value derived impact. advisory firm for all key issues
from the data. of entrepreneurial activity:
5. Identifying and Managing strategy, M&A and transformation.
4. Extending and Expanding the Business Ecosystem This unique approach makes clients
People and Technology Skills High-performing organizations are measurably more successful.
goetzpartners found that many more than two times as likely to As a trusted partner, with a
supply chain organizations can lack regularly integrate external stakehold- valuable track record for success
and a far-reaching network,
more than 50% of the in-house capa- ers into their business processes than
goetzpartners is positioned to help
bilities and technology skills needed their average peers. These companies
US based companies navigate through
for the next two years. It is critical to understand the value that a broad
their transformational efforts.
develop the skills of employees and network of partners can create.
hire subject matter experts to Identifying, developing and managing For additional information
spearhead the supply chain transfor- an ecosystem gives a company access on goetzpartners in the US,
mation. Companies need to be to resources, knowledge and capabili- please contact Jaclyn Rheins:
equipped with deeper industry ties it would not otherwise possess. >> Jaclyn.Rheins@goetzpartners.com
German American Trade Q1 2019 13S P O T L I G H T S
US and Germany Auto
Market Both Set For Major
Sustainability Changes
Both the US and German auto markets have
W ith large combustion engine
SUVs still the best-selling
been slower than other countries to adapt to vehicles in the US, OEMs are strug-
gling to find an approach that takes
electric vehicle (EV) technology, partially advantage of cutting edge thinking
on sustainable mobility development,
because of their larger size as countries, both while at the same time keeping Wall
Street happy. Conscious that the
in terms of population and geographic area. sustainable winds of change are
blowing stronger, Ford has recently
At the same time, these deeply inter-linked announced an $11bn investment
program in electric vehicles by 2022,
markets are going through substantial which more than doubles its previous
commitment. General Motors has
innovation both individually and in tandem. already seen growing, albeit small,
14 German American Trade Q1 2019S P O T L I G H T S
Despite a decrease in engine cylinder size over
the past 10 years, the market for larger vehicles such
as SUV/Crossovers has never been stronger.
interest in its electric vehicle (EV) technology and manufacturing Elon Musk’s Tesla has spent millions
offering, the Chevy Bolt, and has excellence built up over the past 80 to of dollars developing and testing EV
announced similar intentions to 100 years. Accounting for 20% of total batteries. But investing money into
increase its electric and hybrid fleet. German industry revenue and employ- new technology doesn’t always equate
But while sustainable mobility ing approximately 800,000 people, to a mass-market ready product as
momentum is picking up at company there is little political will to meddle quickly and effectively as anticipated.
level, taking into account the with an industry that is an integral German auto-makers are still on a
geographical make-up and demo- part of the country’s social fabric. learning curve. Learning from
graphics of the US is key to catering pioneers such as Tesla and honing
for consumer needs and preference. However, with the political and production capability, while learning
regulatory landscape moving firmly from pioneers can help achieve a
With large combustion engine SUVs in the direction of car electrification, better and more revenue-certain
still the best-selling vehicles in the the industry is having to seriously product as is one late-mover advan-
US, OEMs are struggling to find an examine its future. For example, a tage that Volkswagen and Daimler are
approach that takes advantage of Federal Administrative Court ruling in currently exploiting in the EV sector.
cutting edge thinking on sustainable February 2018 giving cities the right
mobility development, while at the to ban diesel cars, together with a fall An Urban Versus Rural
same time keeping Wall Street happy. in diesel car sales and the lingering Strategy in the UU
Conscious that the sustainable winds emissions scandal, are creating the Despite a decrease in engine cylinder
of change are blowing stronger, Ford perfect storm forcing the automotive size over the past 10 years, the market
has recently announced an $11bn industry to explore alternatives. for larger vehicles such as SUV/
investment program in electric Crossovers has never been stronger.
vehicles by 2022, which more than Leveraging R&D This is not surprising based on the
doubles its previous commitment. Investment in Germany sheer size of the US, where 97% of
General Motors has already seen The automotive industry is by far the land is rural.
growing, albeit small, interest in its biggest investor and employer in the
electric vehicle (EV) offering, the R&D arena in Germany, employing While Ford‘s F150 pick-up truck is
Chevy Bolt, and has announced over 110,000 people., and has been America‘s best-selling vehicle, smaller
similar intentions to increase its one of the main reasons for the cars are gaining popularity in more
electric and hybrid fleet. But while country’s reputation for reliability, densely populated cities, particularly
sustainable mobility momentum is safety and manufacturing excellence. on the coasts. This gives a potential
picking up at company level, taking According to German’s automotive market for EVs from younger
into account the geographical industry association, VDA, the city-based consumers who use cars to
make-up and demographics of the US industry accounts for more than one commute to work and prefer to fly for
is key to catering for consumer needs third of total global R&D spending in longer trans-America journeys. With
and preference. the automotive sector, putting it fully 80% of America’s 327 million
ahead of Japanese and American population living in urban areas it
Similarly, in Germany, car manufactur- companies. Moving forward, it will be makes sense for OEMs to have a
ing giants such as BMW and Volkswa- critical to leverage this investment for specific urban-focused sustainable
gen have built their reputations on development of sustainable automo- mobility strategy. This also opens the
their expertise in combustion engine tive technologies. door for building partnerships that
German American Trade Q1 2019 15S P O T L I G H T S
give access to shared mobility options consumer charging needs. to acquire the right skills and
such as ride-hailing and car sharing expertise could potentially fall too far
which have more traction in densely Germany’s recent move to convert behind the curve.
populated areas. Meanwhile, in rural 12,000 distribution boxes into
areas hybrid vehicles offer an interim charging stations is a great example In Germany, despite the fact that
solution to current consumer reluc- of how to leverage existing infra- Volkswagen has recently pledged 34
tance for EVs. structure to create more EV charging billion euros towards the development
points without infrastructure displace- of battery-powered and autonomous
Are We There Yet? ment. vehicle technology, and has partnered
For EVs to match their combustion with Silicon Valley start-up, Aurora,
engine counterparts, significant The Challenge of Second to bring self-driving taxis, cars and
investment in infrastructure and Guessing Innovation trucks to the road, it and other
continued development in longer life While advances in technology, German OEMs are still working to
battery technology is required. OEMs particularly in the area of automated improve traditional engine powertrain
that can achieve this will be in a driving, are disrupting OEMs, it’s development.
better position to convince the public equally as hard to envisage what the
that EVs are both a viable and reliable end game is for those in the US The ultimate winners and losers in the
alternative. supply chain. As a result, some global automotive industry will not
players are hedging their bets and only be decided by national consider-
In both the US and Germany, charging investing heavily in technology to ations, but also what happens
station infrastructure is key to gaining cope with life without combustion worldwide. As players in the industry
consumer traction. The complexity of engines or traditional car materials. jockey for position, an increase in
changing established infrastructure to While it’s a gamble to invest in investment and research into sustain-
propel EV popularity has been slower expertise and capabilities 5-10 years able mobility solutions, collaboration
than hoped, resulting in bottle necks as before the landscape becomes and acquisitions will become the
governments struggle to accommodate readable, companies that delay plans strategic norm.
16 German American Trade Q1 2019S P O T L I G H T S
GACC Supports 25th
Anniversary of The Alliance
for International Exchange
For many years, the GACC has been a member
of The Alliance for International Exchange, – the
leading collective public policy voice of the
exchange and J-1 visa community.
I In late October, three of our GACC
team members attended The
Alliance annual conference in
2018 marks the 25th anniversary
of The Alliance, and to kick off
the conference, a gala dinner was
Washington. This conference has held with a wide cross-section of
grown in scope and importance over the exchange and training
25 years, this time featuring over community, members of Con-
300 attendees and 60 US government gress, government officials and
representatives. It offers a unique special guests. The guest of honor
chance for J-1 visa sponsors to share was Harriet Mayor Fulbright,
best practices, ask questions and widow of the late Senator from
consult one-on-one with regulators Arkansas whose name is synony-
and State Department analysts on the mous with international study Marie Royce, Assistant Secretary of State for
intern and trainee programs. and exchange programs. Education & Cultural Affairs.
Matthew Allen, incoming Director of
Career Services, and Senior Manager
Cindy Klarwasser agreed with their
colleague Chris Gallagher who noted
that "The Alliance annual conference
has become the central gathering place
in the country for thought leaders and
policy makers on all things J-1 visa
each year. As an intern and trainee
sponsor, our programs are enhanced
by what we learn here."
Keynote speaker Assistant Secretary of
State for Educational and Cultural
Affairs Marie Royce highlighted the
importance of international exchange
programs, as well as the bureau's
five-year strategic goals which include
a boost for business - to increase
The GACC Team (from left): Christopher Gallagher, Matthew Allen and Cindy Klarwasser.
Americans' global competitiveness.
German American Trade Q1 2019 17S P O T L I G H T S
Wunderbar Together:
The 2018 German American Business Awards
By Aruna Valliappan, GACC
T oday’s business is more about
emotional connections than pure
transactions. Connection and excel-
strong transatlantic relations. To
highlight those personal ties and
economic cooperation and success, the
lence are also the pillars of the GACC signature event was integrated in the
network in the US. To reflect this yearlong celebration of partnership that
trend and to foster more connection is the Deutschlandjahr.
among our nationwide network, 2018
marked the re-invention of the Room for Connections
German American Business Awards. With its new format, the event gave
our nationwide membership even
Paying tribute to contemporary more opportunity to connect, as well
corporate culture and the importance as reflect on the strength of our entire
of personal relationships in business, network and the achievements of
the event honored outstanding successful companies in particular.
achievements in the business world Held at the 19 East Event Gallery,
while offering an entertaining event which used to belong to ComEd’s
experiences in combination with predecessor Chicago Illuminating
ample networking opportunities. Company, guests were able to flow
seamlessly from one room to another. In 2018, our member company
The German American Business Awards Each room sparked conversations and HARIBO USA announced plans to set
are equally a platform that celebrates connections in its own way. up its first North American manufac-
turing plant in Kenosha County,
Wisconsin. HARIBO’s commitment
will give a sugar rush to the economy
of the area by adding nearly 400 jobs.
To let our network join in celebrating
this investment, HARIBO offered a
unique signature cocktail to the 200
attendees. For those that prefer a
roaring motor to the sweetness of
gummi bears, member and car
sponsor AUDI let guests take a close
look at the cherry red R8 on display.
Excellence across
all industries
As diverse as the entertainment was
the composition of the 2018 German
American Business Award Winner.
The event recognized companies that
excelled in digitalization, innovation,
and services in areas as diverse as
18 German American Trade Q1 2019S P O T L I G H T S
“We are proud to honor companies which advance industries, provide
jobs, and generate economic growth both in Germany and the US,”
Mark Tomkins, GACC Midwest President & CEO
efficient technology management, to three outstanding winners: especially in regard to our
smart parking solutions and vision CHG-MERIDIAN USA Corp., Clever- valued transatlantic cooperation,
detection systems. As a special reveal city Systems and BBS Automation. there are a lot of positive things
for 2018, two of our members and “German subsidiaries add substantial happening between Germany and
ICATT Apprenticeship Program value to the US economy by deliver- the US and our 2018 German-
network companies, Hermle and ing high quality products, technolo- American Business Awards proved
Heidenhain, designed an exclusive, gies, and services. We are proud to that the positive outweighs the
new award together. Sharing the honor companies which advance negative by far. Rounding out the
origination process of the awards in a industries, provide jobs, and generate night with a multicourse dinner,
short, fun video, guests were poised to economic growth both in Germany a raffle with great prizes, live
hear who was to take home hose and the US,” GACC Midwest President music, dancing, and more
coveted awards. & CEO Mark Tomkins closed the networking opportunities was an
ceremony. excellent reminder of the strength
Peter Riehle, President & CEO of of German-American relations on
WITTENSTEIN Holding Corp. and Wunderbar Together a day-to-day basis and served as
Chairman of the GACC Midwest Board Even though the current political a reminder that we are indeed,
of Directors, handed over the award climate has been challenging, Wunderbar Together.
German American Trade Q1 2019 19A D V E R T O R I A L
MARK 51°7 –
You dream it. You build it.
At the intersection of Innovation and Research
Located on the site of a former GM Flagship Knowledge
Bochum is uniquely suited to
manufacturing plant, MARK 51°7 is where transition from an industrial
academic research and technological powerhouse to the information age
thanks to its many universities,
innovation come together. Creative artists, research institutions, a vibrant
start-up scene, available capital
resourceful makers, blue-collar workers and and enviable talent pool. The
location’s capacity for innovation,
brilliant entrepreneurs join forces to fuel economic core science and technology
growth and innovation. In one location, research competencies ensure that Bochum
will be heralded as a leader in the
institutions and technology firms form a rich next generation technologies, as is
evident by it being the home base of
ecosystem of start-ups and co-working spaces. the Cluster of Excellence RESOLV.
20 German American Trade Q1 2019A D V E R T O R I A L
Open Space(s) network of communities form a hub
for regional and international
connectivity.
The Control Center
Flexible, efficient and sustainable.
That describes MARK 51°7’s
infrastructure perfectly and is why
it has a distinct competitive edge
when it comes to technological
Nostalgia for times like the 1950s developments and Industry 4.0.
Fordist economy is nice, but it’s not Regeneration units and geothermal
what’s driving economies of the power provide sustainable energy
future. Dependence on innovation is supply, e-mobility reduces the
key and Bochum’s MARK 51°7 is use of fossil fuels and fiber optic
forging ahead with access to the cable creates lightning fast
tools of tomorrow in a collaborative internet, directly connected to
environment that puts creativity the most powerful internet exchange
above all else. And since Bochum points worldwide (CDE-CIX
has become the epicenter of cryptol- & AMS-IX).
ogy and encryption technology, the
success is already showing. Diversity Is Key
If you want to see how to attract
In The Heart Of It All new jobs and foster burgeoning
industries, look no further than
Bochum. They’ve forged a
new identity that embraces
resourcefulness, creativity and
innovation. Their universities,
startup incubators, makerspaces,
FabLabs, sports events, exciting Contact information:
music and art scenes, parks and
To learn how you can become part
green initiatives all round out an
of MARK 51°7’s exciting future, visit
MARK 51°7 in Bochum is at the core ideal location for MARK 51°7 to
>> mark517.bochum2022.de
of the fourth biggest metropolitan nurture the next generation of
>> bochum2022.de
area in Europe. It’s interwoven specialists and creatives.
Supported with funds from the Federal-State-Cooperation
on “improvement of regional economic composition”
Ministry of Economic Affairs,
Innovation, Digitalization and Energy of the
State of North Rhine-Westphalia
German American Trade Q1 2019 21G T A I I N D U S T R Y T A L K
German Machine
Exports to US Rising
Boom in the target industries
generates investment goods
Article by Ullrich Umann, Germany Trade and Invest (GTAI) · Translation from German by Sandy Jones, GACC
T he US remains the most important
foreign market for German
engineering. Important customers are
tariffs. With gross domestic product
projected to grow by just under three
percent and investment in China grow
increased 9.7 percent to $ 226.2
billion (US $). Germany held a
delivery share of about 11 percent.
investing strongly in 2018 thanks to by seven percent in 2018, capital German machine builders are
the good economic situation. goods demand is at a high level. particularly successful when
individually adapted and high-
German machine manufacturers are US Remains Dependent quality solutions are needed.
finding a large sales market in the on Machine Imports
USA with wealthy industrial The US industry meets its machine Many German Branches
customers. This will not change for demand (SITC 71-74) by 60 percent in the USA
the foreseeable future, especially since from its own resources. The rest is The solid market position of German
mechanical engineering products have imported, primarily from China, mechanical engineering benefits
been left out completely in the Japan, Mexico and Germany. In from the relatively high number of
ongoing discussion about US punitive 2017, US imports of machinery established German manufacturers.
Their market knowledge and
USA: Growth forecasts for selected target sectors customer proximity are a valuable
of mechanical engineering (in percent) selling point. In the directory of
Average members of the AHK USA, 83
Industry sector 2018 2019 2018-2021 German companies based in the
Automotive and automotive parts 3 3 2 United States can be found under the
Mining including oil and gas 2 2 1 heading Mechanical Engineering and
Woodworking 4 4 1 Automation. From the category sales
and machine trade another 14
Construction Metals 4 4 2
companies are added.
Construction 13 4 3
Engine and turbine construction 7 5 3 Business cycle increases
agricultural machinery 7 7 3 machine imports
drilling equipment 20 6 9 Imports of machinery and equipment
Metalworking machines 4 5 3 are increasing in the current
industrial machinery 7 9 4 economic situation. For example, at
9.3 million euros, German deliveries
heavy commercial vehicles 13 4 2
in the first half of 2018 were 5.5
Forging and stamping technology 7 9 2
percent higher in value than in the
Aerospace 3 6 6 same period of the previous year. At
shipyards 0 -3 -2 the same time, the US has defended
Steel and Iron 3 3 -1 its leading position as the target
Source: MAPI Foundation, 2018
22 German American Trade Q1 2019G T A I I N D U S T R Y T A L K
The US remains the most important
foreign market for German engineering.
Imports of machinery and equipment are
increasing in the current economic situation.
market for German mechanical
USA: machine imports (percent, as of 2017)
engineering at this time, just ahead
of China. This is the result of the
calculations of the German
Engineering Federation (VDMA)
China
based on data from the Federal
16%
Statistical Office.
Mexico
VDMA Chief Economist Ralph
Rest 15% Wiechers commented on this
45% development as follows: "The threat
and introduction of tariffs or
Japan extra-territorial sanctions, of course,
13% unsettle many investors, although
this is reflected in the engineering
Germany
sector with a certain delay, because
11% many customer projects are planned
long-term and orders already placed
have a lead time of In addition,
Source: US Department of Commerce, US International Trade Commission German mechanical engineering
German American Trade Q1 2019 23G T A I I N D U S T R Y T A L K
Growth Champion Conveyor infrastructure, especially of train
Technology stations and airfields.
The German import share for
conveyor technology in 2017 was 12 By far, however, Germany's share of
percent. The reason for the imports was by far the highest
triumphant progress of conveyor among plastics and rubber machin-
technology from Germany is the ery in 2017, at around 29 percent,
increasing automation of production, food and packaging machinery at 25
the expansion of the online trade percent, and printing and paper
with its nationwide logistics centers machines at 24 percent.
and the expansion of the transport
Import of selected machine types
(in million US $, change in percent)
About the Author
Change
Ullrich Umann compared From
Director SITC position Description 2017 to 2016 Germany
1130 Connecticut Ave., NW 723, Construction and building 12583 15.9 1392
Suite 1200 728.3 material machines, mining
Washington, DC 20036 machines
T +1 (202) 629 5712
724 Textile and leather 4274 10.3 363
>> Ullrich.Umann@gtai.de
machines
>> www.gtai.de
725, Printing and paper 2761 4.6 637
technology continues to be in great 726 machines
demand in many countries in order 727, Food and packaging 3480 -0.1 873
to promote modernization." 745.27 machines
728.12, Woodworking machinery 1374 12.3 238
Construction Machinery 728.44
Particularly in Demand 728.42 Plastic and rubber 2099 11.2 600
The currently booming import machines
business with construction and 742, Pumps, compressors 9496 9.6 1564
building material machines in the 743.1
USA is attributable to the good 744 materials handling 12886 13.6 1585
construction sector here. Mechanical 731, 733, Machine tools for 7583 8.3 1473
engineering companies from 735 metalworking
Germany accounted for 11 percent of Source: US International Trade Commission
these imports in 2017. An above- A report on the US market for machine tools can be found at: http://www.gtai.de/
average increase in imports was also MKT201809218003
recorded by materials handling. Further information about the USA can be found at: http://www.gtai.de/usa
24 German American Trade Q1 2019Business travel made better
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US Midterm Elections:
Changes Are Coming to Washington
By Caitlin Hickey, Director of Government Relations & Legal Affairs, RGIT
M illions of Americans took to
the polls on November 6,
2018 to cast their votes in the
Looking at the congressional results,
the Republicans expanded their
majority in the Senate while the
within the purview of the President.
There may be opportunities here
and there for congressional over-
2018 midterm elections. In total, Democrats gained enough seats to sight and of course Congress
all 435 seats in the House of clinch control of the House of controls the financial strings, but
Representatives, 35 out of 100 Representatives. With the Lame Duck otherwise the President can
seats in the Senate, 36 governor- period winding down and a new primarily progress his agenda in
ships, and various state- and Congress ready to begin work in these areas without much interfer-
local-level positions and initiatives January 2019, many questions ence from Congress.
were on ballots across the surround how – or if – Washington
country. Heading into election will change. However, there are a couple times
day, speculation swirled around when a President needs help from
whether the outcome would Effect of the Election the Senate and so it is advantageous
produce a so-called “blue wave” Results on the Administration that the Republican party retained
or “red tide” in reference to each More likely than not, it will be control there. As cabinet officials
party’s color. Since almost all business as usual for the executive and other political appointees come
races are now final, the general branch. Although the composition and go, the President will still be
conclusion is that both parties of Congress will change, many confident that his selected replace-
can find something about which areas of foreign policy, trade, ments can be confirmed and instilled
to be happy. immigration, and deregulation are in their roles. But perhaps most
26 German American Trade Q1 2019W A S H I N G T O N U P D A T E
notably, the Senate can continue the Senate side if they concentrate
About the Author
advancing one of the President’s on attractive parts of the legislative
signature achievements over the past package such as guaranteeing
two years: reshaping the federal permanence for the individual tax
judiciary for decades to come by cuts from the first tax reform or
placing conservative jurists on the making it easier for families to save
courts. for retirement.
Legislative Priorities Nevertheless, the moments of unity
in the New Congress and harmony within Congress might
With the House and Senate being in be few and far between. Controver-
different hands, it underscores the sial issues like funding for the wall
need for compromise, without which along the Mexican border or repeal
there will be two years of obstruction of the Affordable Care Act (colloqui-
and gridlock. It might seem prepos- ally known as “Obamacare”) might
terous to expect any sort of biparti- be raised from time to time to keep
Caitlin Hickey,
sanship in a Washington often these issues on the minds of the
Director, Government Relations
characterized by deeply divided electorate base as the 2020 elections and Legal Affairs
rancor. Yet behind the scenes, there near. Yet they have little chance of >> chickey@rgit-usa.com
are enough dealmakers and common passing because no piece of legisla- >> www.rgit-usa.com
ground for Congress to forge ahead tion can be enacted solely along
on a few policy issues. Furthermore, party lines.
This material is distributed by the
neither party has a broad majority in Representative of German Industry and
the House or Senate, so they do not In addition, regaining the majority in Trade (RGIT) on behalf of the Federation
need to win over many votes from the House means the Democrats will of German Industries (BDI) and The
the opposing party. chair the committees that have Association of German Chambers of
Commerce and Industry (DIHK). Additional
oversight over the President and his
information is available at the Department
Policy ideas that are ripe for agencies. They will not only decide of Justice, Washington, DC.
collaboration include financing for which topics are featured during
a major nationwide infrastructure committee hearings, but certain in November 2020. Over the coming
overhaul, additional economic committees also have investigative months, both parties will reflect on
sanctions targeting Russia, pharma- authority. If the Democrats so what went right and wrong for them
ceutical drug pricing reform, and choose, they can guarantee that during this cycle. But perhaps the
addressing the skills gap through uncomfortable topics remain in the most obvious conclusion is that the
workforce development and voca- spotlight for endless news cycles. slim majorities held by both parties
tional training. Even the proposed in the House and Senate shows that
tax reform 2.0 that sailed quickly Looking Ahead to 2020 the American people remain just as
through the House before the The dust has hardly settled on this divided as before. Thus, there was no
midterms might garner enough year’s midterm elections, but interest blue wave or red tide, but rather the
interest from some Democrats on has already shifted to the next one landscape looks vaguely purple.
German American Trade Q1 2019 27You can also read
