Jump to content
Join the Unexplained Mysteries community today! It's free and setting up an account only takes a moment.
- Sign In or Create Account -

Burned by Offshoring


questionmark

Recommended Posts

Burned by Offshoring, Mid-Sized Firms Return Production to Germany

By Janko Tietz

The trend towards offshoring production from Germany to other countries is slowly being reversed, with medium-sized businesses leading the way. In fact, Germany is itself becoming an attractive location for foreign investment.

When the metal sheets came back from Romania "as if they had been gnawed at by rats," Rutger Dautel knew that his company's adventure in offshoring production had come to an end. He slammed on the brakes.

Dautel is a classic German medium-sized company based in the southern state of Baden-Württemberg that manufactures tail-lifts and tipper structures for trucks. Workers at the company's plant in Leingarten separate the metal used with highly modern gas cutting machines. Workers in Romania used straightforward metal shears for the same work.

"We couldn't present that to any customer," says one Dautel welder. "There were major qualitative flaws in the processing. We had to constantly touch things up in Germany. The Romania deal was a total fiasco." Of course, when company management embarked on the endeavor three years ago, they had a different outcome in mind.

Back then, things weren't going well for the business, which employs about 250 people, and layoffs ensued. Cost pressure was high and the company's profitability was at risk. Then, in 2004, one part of the assembly process was relocated to Romania.

It didn't take long for the disenchantment to creep in. For work to even begin in the city of Sibiu, Dautel first had to ship the materials there. Its Romanian business partner seldom met deadlines, and quality was often extremely poor. Even just shipping the product back to Leingarten often proved difficult -- shipments often got stuck at customs for days at a time, and that led to delays back home.

Like many other managers, company head Dautel had dreamed of massive savings. At the end of the day, though, it turned out to be a zero-sum game -- one that cost him a lot of nerves.

Full story, Source: Der Spiegel

Link to comment
Share on other sites

 
  • Replies 2
  • Created
  • Last Reply

Top Posters In This Topic

  • questionmark

    2

  • ships-cat

    1

Popular Days

Top Posters In This Topic

Fascinating. I was particularly intrigued by the company that tried to make cranes in China.

One swallow does not a summer make, but nevertheless an interesting trend.

Meow Purr.

Link to comment
Share on other sites

Fascinating. I was particularly intrigued by the company that tried to make cranes in China.

One swallow does not a summer make, but nevertheless an interesting trend.

Meow Purr.

I always maintained that the Germans can take their machines to China, but not their highly qualified workforce if they want to save money. The joke of this is that they have been selling the same machines all around the world. So if there are no comparable products from other countries it is not due to the machines.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Recently Browsing   0 members

    • No registered users viewing this page.