The Germans: More Like Us

In the 1980s, when Japanese corporations started buying U.S. buildings and U.S. companies, America, well, freaked out. We heard a lot of rhetoric about the country being for sale, and much talk of the need for legislation to protect such important national treasures as Columbia Pictures and 30 Rockefeller Center. So it’s an important sign of the U.S.’s adjustment to the global economy that the recent buying spree by German companies has occasioned no protest. The Germans are coming–actually, they’re already here–and no one cares.

In part, that’s because the U.S. economy is still in fine trim, and in part it’s because in retrospect the Japanese did the U.S. a favor by paying outrageous prices for overvalued assets. But in part it’s also because in some sense national boundaries do matter less and less, at least in the case of the world’s largest corporations. Daimler Benz, for instance, paved the way for its acquisition of Chrysler by adopting accounting rules stringent enough to satisfy U.S. investors. And Deutsche Bank, which now appears on the verge of acquiring Bankers Trust, has done its best to establish a strong and independent U.S. division. It’s done so in a rather inept way–paying huge sums of money to attract talent from other banks and brokerages–but the effort was genuine.

At the same time, the German companies that have made aggressive acquisition moves in the U.S.–Daimler, Bertelsmann, Heinkel, and Deutsche Bank–are doing a better job of picking their targets than the Japanese did. Daimler probably overpaid for Chrysler, but the deal plays to Daimler’s core strengths in a way that Japanese conglomerates’ efforts to diversify never did. The truth is that the best German companies–most notably Daimler and Bertelsmann–are exceptionally well-run, and they have global ambitions that even Europe cannot satisfy. In that sense, these companies are the peers of GE, Disney, and Microsoft more than the peers of other German companies.

Of course, given what happened to the Japanese economy not long after its corporations went on a buying spree, one might wonder if the recent German invasion bodes ill for that country’s economic future. But Germany’s problems are not hidden, as Japan’s were in the 1980s. High unemployment, restrictive regulations, the continued impact of the union with East Germany: these are no secrets. It’d be wrong to say that Daimler and Bertelsmann are succeeding in spite of Germany, but their success is increasingly divorced from the economy’s overall well-being. As a result, where the Japanese buying spree prefigured the collapse of the Japanese real estate market and of the Nikkei, the German buying spree reflects instead a growing separation between the top-flight German corporations and the rest of the economy. In buying U.S. corporations, in fact, these companies are becoming more like us rather than the other way around.