Archived posting to the Leica Users Group, 2005/02/19

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Subject: [Leica] Leica - paragraph 92
From: feli2 at (Feli)
Date: Sat Feb 19 13:05:30 2005
References: <>

Right on the money, Nathan.


On Feb 18, 2005, at 10:02 PM, wrote:

> As painful as Leica's current travails are for those of us who have an
> attachment to the brand and the history and tradition associated with
> it (and I count myself in that category), throwing German taxpayer
> money at the company will not solve the problem and would anyway
> contravene EU rules. There are very few cases where state aid has been
> a success, in the sense of helping a company survive a temporary
> problem and then stand on its own again. The only case I can think of
> were the Chrysler loan guarantees in the 1980s--the company survived
> and repaid the loans ahead of schedule, but they also had new
> management that was prepared to do a painful restructuring and new
> products that were successful in the market. In virtually every other
> case state aid is just money down the drain.
> Leica is a commercial enterprise in a capitalist economy. It is the
> nature of such an economy that a company that cannot make a profit
> eventually goes bankrupt. The movement of manufacturing jobs to low-
> cost locations has been taking place everywhere in the rich world, and
> yet countries like the US, the UK, the Netherlands or Scandinavia have
> managed to replace the lost jobs and have unemployment rates well into
> the single digits. Countries like France, Germany, Spain, Italy, which
> have a long tradition for state aid to ailing enterprises, lots of
> labour market and other regulations, and general state meddling in the
> economy, all have unemployment rates in double digits. There is a
> connection here. And note that the low-unemployment countries include
> not just the perfidious Anglo-Saxons but also Continental countries
> which have maintained a welfare state and a high level of solidarity.
> This is indeed the direction that the German government is taking,
> with the Hartz (sp) labour market reforms as an initial step.
> Leica will survive in some form, but not as a part of a handbag
> marketer--the Hermes investment has given the company nothing except
> some cash to allow it to operate for a bit longer. What Leica needs is
> to be bought by someone like Canon, Sony et. al., in other words a
> company that is successful in the photo business and can provide Leica
> with some economies of scale, access to technology that Leica needs
> etc. This is how the boutique car brands like Saab and Jaguar have
> survived until now. They still face difficult times, but without the
> investments by GM and Ford, respectively, they would surely be gone by
> now.
> Nathan
> Nathan Wajsman
> Almere, Netherlands
> Print sales:
> Image licensing:
> ----- Oorspronkelijk bericht -----
> Van:
> Datum: zaterdag, februari 19, 2005 1:29 am
> Onderwerp: [Leica] Leica - paragraph 92
>> As to German companies buying Leica stock to rescue the company,
>> why didn't
>> they do it at the time of the Hermes transaction?
>> Unfortunately, Leica is neither in the Black Forest or any other
>> part of
>> Bavaria or the state of Baden-W?rtemmberg, which, as high-tech
>> industrialareas would be very pleased to offer state subsidies for
>> an ailing company
>> of Leicas reputation. The state of Hessen (where Solms and Wetzlar
>> are)isjust not as rich, and help from Berlin is just as unlikely.
>> The present economic situation in Germany is that hardly any
>> companies are
>> investing in German production sites at all, in fact if the unions
>> demand a
>> pay rise the management threatens to move elsewhere,usually the
>> new member
>> states of the European Union, or even farther afield, most of the
>> telephonehotlines are already located in the UK or even India.
>> Even suffering from the 14th day of a 5 day collect and return repair
>> service for Fujitsu-Siemans computers located in the wilds of the
>> ex-GDR,
>> salaries there are around 30% lower than in the rest of Germany! and
>> unemployment is running at around 20% too.
>> On the cards at the moment are for example massive lay offs
>> planned at
>> GM-Opel(up to 10,000) Deutsche Bank (6,400 although their profits
>> are the
>> highest in their history), one of the largest building contractors
>> Walterbauhas gone bust and the best bits have been grabbed by the
>> Austrian Strabag
>> concern.VW has just announced lousy figures for the last quarter
>> and are
>> reducing workers benefits across the board.
>> At the same time CEOs salaries have risen, on average,by 240% in
>> the last
>> couple of years, workers salaries by 2.4%. If it wasn't verboten
>> there would
>> have been a national strike here ages ago.
>> Leica has been promising "Jam tomorrow" for too long now, they
>> didn't just
>> miss the boat, they lost the map telling them where to find the
>> water and
>> were always too proud to ask the way.
>> Douglas
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In reply to: Message from nathan.wajsman at ( ([Leica] Leica - paragraph 92)