The EconomistApril 14th 2018 9GERMANY2
1SPECIAL REPORTup by a new spaceship-like showroom slap in the centre of the
city that belongs to Tesla, the innovative car firm created by Elon
Musk, an eccentric American billionaire.
Tesla produced the world’s first all-electric luxury car back
in 2012. Its models have been fitted with the hardware required
for full automation since 2016, and it is due to bring out its first car
without a steering wheel in 2019. German carmakers are lagging
behind, and some have recently been accused of cheating in
emissions tests.
It is not that Germans are not innovative. The first hybrid
car, the Semper Vivus (pictured above), was designed by Ferdi-
nand Porsche in 1900; the first self-driving car, the VaMoRsvan,
was built by Mercedes in 1986 (both are now in museums). Mrs
Merkel has presided over an increase in R&Dspending to 3% of
GDP. About 34% of global electric-car patents are German. The
country’s firms are expert at teaming up with academics and
shop-floor workers to put new inventions into practice. Recently
they have focused on automating and digitising traditional pro-
duction processes under the heading “Industry 4.0”.
In Sindelfingen, Daimler’s airport-sized factory on the edge
of Stuttgart, a vast assembly hall is uncannily quiet except for oc-
casional clunks and whirrs. On a production line a robot arm lifts
a newly pressed roof, rotates it and sets it onto a car body. Staff
monitor the machines, sticking post-it notes on the glass walls of
their office. This process of refinement has been going on almost
continuously since carmaking began at Sindelfingen in 1926. But
Tesla and all it stands for has rendered it insufficient.
“We have a long tradition of seeking perfection and think-
ing everything through,” says Michael Hafner, who runs Mer-
cedes-Benz’s self-driving car programme. The German way is to
issue a new product only once it is absolutely right, explains Mo-
ritz Mueller-Freitag, a technology writer. Whereas Tesla beams
refinements of its automated driving software to cars already on
the road, Daimler updates its “Drive Pilot” programme (which
mitigates the effects of sudden braking) only when it brings out a
new model. Mr Hafner points out that new managers at Mer-
cedes-Benz are now trained to accept that not everything will
succeed: “If you try out new things quickly and every xth experi-
ment works out, that’s sometimes fasterthan iterative progress.”When the car industry’smain job was to fine-tune the inter-
nal-combustion engine, there was no need for leaps into the
dark. But when new technologies are transforming the very
meaning of the terms “car” and “engine”, makers must make
much bolder changes—and the collaborative, corporatist style of
German management does not lend itself to those.Mentality update
The shift to automation highlights the growing importance
of computer software even for traditional German engineering
firms. In a glass complex amid rolling hills an hour north of Stutt-
gart, Stephan Hönle, head of automateddriving at Bosch, ex-
plains his technology firm’s co-operation with Mr Hafner at Mer-
cedes-Benz. “This”, he says, brandishing an octagonal black
sensor for a car bumper, “needs an algorithm.” Yet the mentality
update is taking its time. The chancellor has repeatedly promised
to invest in digital technology and skills but so far has delivered
relatively little. As Brigitte Zypries,a former economy minister,
likes to put it: “In the age of the internet of things, the United
States has the internet. Europe has the things.”
German industry recognisesthe need to catch up. In March
last year Daimler announced it was speeding up its work on elec-
tric cars and would link up with Bosch to create self-driving taxis
within three years; that resulted in the collaboration between Mr
Hönle and Mr Hafner. The question is whether German firms
can combine their tried-and-true magic formula with some An-
glo-Saxon thrust and vim.
Matthias Wissmann, who for nearly 11 years was the Ger-
man carmakers’ chief lobbyist, thinksthey can: “Two worlds are
coming together.” Positive signs include the Daimler-Bosch col-
laboration; the German government’seasing last year of regula-
tions governing self-driving cars, which has made testing easier;
and new industry-funded chairs at German universities in sub-
jects like electrochemical engineering to help the country catch
up on its rivals. Indeed, Mrs Merkel herself has said she wants a
self-driving car when she is older. If her country gets things right,
it might even be German. 7Germans
have a long
tradition of
seeking
perfection
and
thinking
everything
throughTHERE IS A crack ofhowitzer fire and a plume of smoke
from above the birch trees, then silence falls on the milky
winter afternoon in Pabrade, close to Lithuania’s border with
Belarus. “There come the Marders!” cries Lieutenant-Colonel
Bösker of the Mechanised Infantry Battalion 371 of Germany’s
Bundeswehr as four light tanks roll out of the forest. Their job is
to lure the enemy into the line of fire of the Leopard heavy tanks,
which issue a series of earth-shattering booms. All this action,
the lieutenent-colonel explains, is purely defensive: “The point is
to slow down the enemy and buy time for political talks.”
The exercise, codenamed “Winter Wolf”, is part ofNATO’s
“enhanced forward presence” (EFP) in Poland and the Baltic
states, a response to Russian aggression in the region. In each of
these countries a “framework nation”—in Lithuania’s case, Ger-
many—leads a multinational battalion charged with deterring
Russian interference. Until recently such a deployment close toForeign policyThe somewhat
reluctant hegemon
Germany’s traditional foreign-policy doctrines are
coming under pressure