Part of my last London assignment was managing the German energy markets, my highest volume and most profitabile region. Germany has the largest GDP in Europe. Not only does it have a large geographic size, but the country is a world economic force. The Rhine River transports raw materials for manufacturing and exports products to ports around the world. The country prides itself on efficiency, honesty, and safety. The German population is well-educated, organized, and disciplined. Their highways and railways are designed for speedy transport throughout the country. When driving in Germany, I kept to the inside lane for fear of getting run over, even though I was driving at higher speeds than allowed in the US.
The German office was in an older building with no air-conditioning located near the Hamburg airport. The energy marketing team, composed of 40 professionals, was a small part of an office complex that housed upstream and downstream employees. I traveled there regularly to review our marketing operations, and to meet customers. I highly respected the marketing team for their professionalism and courteous manners. Germans are usually hierarchical and many obediently follow orders, which can be both a blessing and a curse. I loved to visit the Hamburg office, interact with welcoming staff, and travel this beautiful country.
The German gas markets were in turmoil soon after I arrived in London to begin my new assignment. The 2008 recession caused gas demand to decline. The gas markets were primarily composed of long-term contracts that allowed for periodic price renegotiations. Buyers were demanding new pricing terms. The glut of gas reduced spot prices to well under long-term contract prices. This led to lengthy conflicts between suppliers and buyers. Our German gas market share and net margins started to decline. The marketing team needed to adjust and reorganize in response to a rapidly changing market. My German team resisted these necessary changes.
Germany has employment laws which make it difficult to reduce employment when a business experiences financial difficulty. The lowest level employees are virtually impossible to lay off without legal cause. Managers can be let go, but it is very costly. The employees elect Staff Council members who review organizational changes and advocate for employees. I followed the system, and my reorganization plan was reviewed by Staff Council, a time-consuming process. I was able to gain approval because I stressed that without approval, the marketing team would not be profitable due to the reduced gas demand. A reorganization is better than financial losses. I met the powerful Staff Council with powerful arguments.
In the inner courtyard of the Hamburg office, there were crosses planted with the names of terminated employees, none from my department during my managerial period. A poster on the courtyard wall showed the decrease in the Hamburg office employees over time. It was a somber reminder of the reality of an efficient marketplace. Even in a country that has laws designed to protect employees, change eventually happens, for better or worse.
In his 1932 publication, Moral Man and Immoral Society: A Study in Ethics and Politics (Must Have Books, Victoria, BC, 2021), Dr. Reinhold Niebuhr discussed in Chapter 8 “Justice Through Political Force.” The political and economic issues that I faced in Germany were understood by Niebuhr. “The combination of political and economic power which the dominant classes set against the worker in the modern state must be met by a combination of political and economic power.” (page 112) The Staff Council was resistant to any changes that involved employees and used a lengthy process to thwart management actions. “The worker’s economic weapon is weak … because the worker is never able to match the economic resources of the owner in a dispute of some duration. He can be starved into submission” (page 113) It was in the Hamburg manager’s best interest to get the Staff Council to approve the reorganization because the gas business was in decline.
In a democracy, most citizens have faith in change through the democratic process, even if the political process takes time. The abolition of slavery, health regulations, industrial safety, and suffrage all took many years before gaining legislative victories. The powerful resist giving up power. “Everywhere the state has interfered in the processes of economic society with the purpose of diminishing the privileges and restraining the power of the owners, and adding to the privileges and power of the workers.” (page 115) Civil rights legislation did not happen because of the justness of their cause. It happened through political pressure from unions, religious organizations, and economic force. “Pressure must be used.” (page 117)
Those in power will seek to profit from those without power. “The fact is that the interests of the powerful and dominant groups, who profit from the present system of society, are the real hindrance to the establishment of a rational and just society.” Educators teach that sheer intellectual reason alone will allow just changes to occur. Niebuhr says that this is foolishness. “Economic groups express themselves in terms of pure selfishness. … Politics are given their general direction by the pressure of interest of the groups which control them.” (page 119)
There are privileged individuals who seek justice for those living in unjust conditions. “There will always be individuals in the more privileged classes who will, by force of rational and moral idealism, identify themselves with the less privileged classes and fight their political battles. But the number of these will probably always remain limited.” (pages 119–120) More education and patience for the political system to react will not solve injustices. “Rationality belongs to the cool observers. … And no one will suffer the perils and pains involved in the process of radical social change, if he cannot believe in the possibility of a purer and fairer society than will ever be established.” (page 123)