It just finally dawned on me -- Ford drastically cut back at its UK factory in Daghenam and plans to transfer the production to Germany. Besides adding one more log on the fire between the two countries, didn't this violate everything the Washington Consensus holds to be true? The UK is a model of flexible labor markets, and Germany a model of inflexible ones -- not to mention high wages. And yet, somehow Ford thinks they can make more profit there. Not to mention more than in the US, since some of this output will be exported for the US-built Ford Explorer. Why? The FT survey of North Rhine Westphalia says "whatever its tribulations in the market, Forde Werke has at least avoided some of the internal problems which have marred labour relations at many of its US factories and especially Dagenham." In other words, when they are forced to pay workers more and treat them better they get so much less guff that they come out ahead. It's sounds almost like social democracy is a win-win situation. It almost makes the Rhine model sound superior. Odd that I don't remember anybody drawing that conclusion in the english-speaking business press when all this was going on.
__________________________________________________________________________ Michael Pollak................New York City..............mpollak at panix.com