Sunday 26 February 2017

'If any company can come back from this, it is Volkswagen'

German-Irish Chamber of Commerce chief executive Ralf Lissek leads German investment in Ireland at an interesting time in Europe's history, writes Sarah McCabe

Ralf Lissek Chief Executive Officer German-Irish Chamber of Industy and Commerce.Pic Steve Humphreys 6th October 2015.
Ralf Lissek Chief Executive Officer German-Irish Chamber of Industy and Commerce.Pic Steve Humphreys 6th October 2015.

Ralph Lissek is in great form when we meet at the German-Ireland Chamber of Industry and Commerce headquarters on Dublin's historic Fitzwilliam Square, days before Germany's thrashing by Ireland on the football pitch. The chamber has just hosted its biggest event of the year, its Oktoberfest celebration, for which 450 Irish and German executives gathered in Croke Park over steins of weissbeir and wurst. "The Irish think that, because they are used to pints, they can handle more beer than most Europeans. But I don't think they were prepared for the steins," he smiles.

As head of the chamber, Lissek (53) represents one of Ireland's most important sources of foreign investment. Around 150 German companies have operations in this country. Their ranks include some of the world's most recognisable brands - Deutsche Bank, Siemens, Bosch, Miele and Bayer - as well as lesser-known but still enormous organisations such as Liebherr, the crane business which employs hundreds in Kerry, or Kostal, a manufacturer of electrical components for cars which employs around 600 people in Mallow, Co Cork.

Germany is also a huge source of business for Irish companies, Ryanair among them. This year was the airline's first at the Oktoberfest celebration. Michael O'Leary has ambitious plans for the country. Ryanair is opening a new base at Berlin Schonefeld and intends to grow market share from 4pc to 20pc by 2019.

Lissek hails from Wuppertal, a town near Dusseldorf famous for aspirin, which Bayer patented there in the late 19th century. He held chamber of commerce roles at the Hague and Brussels before moving to Ireland. He lives in Baldoyle with his wife and three children.

The chamber is almost entirely financed by its members, though it takes a contribution from government. As well as running networking and business events for members, it provides recruiting, advisory and market entry services.

Despite Germany's reputation for electronics, the biggest names in German-Irish business work with food, Lissek says. "This falls under the radar but Aldi and Lidl are definitely the biggest German companies in Ireland from an employment perspective.

"They are typical German companies because they are family-owned. The German tradition is to hold on to businesses; there is a heritage of successful companies owned by German families. The rapid, unsustainable growth and quick sale of a business is not in our genes. The mentality in Germany is that you build your business over generations, you stay in charge, you keep and engage your employees long-term.

"Despite the way the world of work is changing, many German employees still stay with companies for their entire lives. That culture is even embedded in law - companies over a certain size must have an employee representative on the board, an arbeitsdirektor. Giving shares to employees is normal too. That has worked very well at driving innovation in companies like Bosch, Siemens and Miele."

The element in the room is Volkswagen, which boasted both an employee representative on its board of directors and a decent degree of family ownership, and still presided over one of the biggest corporate scandals Europe has ever seen. About 100,000 Irish vehicles are implicated.

While he does not want to speak on behalf of Volkswagen, Lissek says: "What I do know, what I am sure of, coming back to the mentality of German companies… if you have a German company that has made a mistake of this significance and impact, of all the car builders in the world, I am sure that Volkswagen can get out of it - because of their structure.

"It is very family-involved, local government-involved, there is common ground in the management, which includes employees. If any company can come back from this, it is Volkswagen. It is a very, very long-term company… it is only a question of time. How long it takes, nobody knows."

German manufacturing has until now been recognised as a stamp of quality around the world. Can that reputation survive what has happened at Volkswagen? "That's a good question. It will take time to build trust back up."

The other major topic keeping Germany on the front page of international newspapers this year is the European refugee crisis. The country has been praised for its welcoming approach to refugees. The subject dominates all else in Germany at present, Lissek says, overshadowing an election due next year.

"At the moment everything in Germany is overshadowed by the refugee crisis. Everything is influenced by it. It goes into each and every small village now, getting ready for refugees to assimilate into the community. Two politicians from different parties told me that this challenge is bigger than reunification.

"Here in Ireland that is something we probably do not see." Turning to Irish politics, Lissek had no major asks of Budget 2015. "We think the Government over the years did a good job and we would like that direction to continue. Of course from a German mentality, part of our genes within the German-Irish chamber, we are always keen on a balanced budget. We still run year-on-year deficits and it would be helpful to stop this. The figures show there is still more money spent than the country earns."

There are several key differences in the way German and Irish people do business, he explains. The primary difference is that Germans cannot abide uncertainty. "In Germany, two plus two is always four. In Ireland it is three and a half, or maybe five. Both have their advantages! I am not saying one is better than the other. What I mean is that, culturally if you compare the two countries, the place we are most different is our attitude to uncertainty and risk aversion.

"The Irish can live with uncertainty; the Germans hate it. Irish people are happy to reply on verbal contracts whereas Germans want things in writing, signed. My wife is Irish. I am already starting to talk about our summer holidays next year, looking into the good deals, trying to get good value flights booked. She is telling me that we can talk about it after Christmas."

Another important difference between Germany and Ireland's corporate cultures, he says, is education. Two-thirds of people entering the German labour market do so through an apprenticeship, not with a degree. The system provides young people with routes into 350 different professions, giving two years of practical training at participating companies.

Lissek himself entered the workforce under a business administration apprenticeship, as did former Aer Lingus boss Christoph Muller. Apprenticeships make it cheaper to employ entry level candidates while giving young people valuable real-world experience, he says. Not that many jobs really require a degree to perform them - Ireland's vast funds administration sector, he says, could benefit hugely from apprentices.

Companies, rather than government or universities, shape the content of the apprenticeship, meaning it changes rapidly according to industry need; Germans were receiving IT training long before the importance of IT skills filtered through to universities in other countries.

The chamber consults regularly with government on the issue. "It also requires a mindset change," says Lissek. "Irish parents need to understand that their son or daughter working as an insurance officer in an apprenticeship at an IFSC institution has a very good job, even though they don't have a degree."

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