Leading German firms push for world-wide growth

Date: 02/09/1999

By Bruce Barnard

Deutsche Post's multi-billion-euro spending spree has ushered it into the select club of German companies which are moving aggressively abroad, abandoning the insular tradition of the post-war period which allowed their European rivals to gain a competitive edge in an increasingly global marketplace.

Daimler's takeover of the US' number three car maker Chrysler, Deutsche Bank's purchase of leading American investment bank Bankers Trust, and Deutsche Telekom's acquisition of the UK's One2One mobile telecoms group have highlighted the new found assertiveness of German industry as it seeks global reach.

The German transport industry has traditionally punched below its weight, allowing foreign companies, generally Dutch, to handle the imports and exports of Europe's biggest economy (Rotterdam has more German traffic than Hamburg or Bremen). But now German companies are reclaiming their domestic markets and chasing business abroad, largely through joint ventures and takeovers.

Lufthansa's determination to exploit the giant German air freight market was underlined by its decision to spin off its cargo division into a separate company, Lufthansa Cargo, the world's second largest international cargo airline after Federal Express.

DB Cargo, the rail-freight wing of Deutsche Bahn, will launch Europe's first cross-border rail company with Dutch firm NS Cargo in January and is likely to swoop on other European railways during the year. In addition, Deutsche Post has bought leading Dutch and Swiss transport firms which have made a handsome living hauling German freight.

German transport firms also are joining forces to keep outsiders at bay. Lufthansa Cargo and Deutsche Post together own 50% of DHL and many in the industry feel it is only a matter of time before the company becomes totally German.

The financial muscle of its two German shareholders undoubtedly played a role in DHL's recent announcement of a €1.56-billion investment programme - the biggest in its 30-year history. Meanwhile, DB Cargo recently wooed Deutsche Post away from a planned independent rail joint venture with the US parcel group UPS.