A top manager would have to be pretty desperate to take on the job of Karstadt chief executive. Or of Air Berlin. Or of any other major German company that has been sailing on bankruptcy’s edge for years. Only a few really tough turnaround experts are left in Germany.
It used to be different. In the 1980s and 1990s, executives like Karl-Josef “Kajo” Neukirchen took on ailing companies by the dozen.
Unlike today’s Germany, other countries don’t lack corporate doctors. In the United States, a couple of renowned specialists actually seek out such challenges – usually lured by the promise of high bonuses if they succeed.
In Germany, hardly anyone will attempt a “Kajo” and for one major reason: Few countries make restructuring as difficult as Germany does. The works councils and unions have the power to delay essential reductions in staff for months or even years. Politicians interfere to an extent that would be unthinkable in many other industrialized nations.
Also, everything, absolutely everything, takes place in the public eye, and media members are rarely, if ever, on the side of those doing the restructuring. This is clearly the case with Opel and Karstadt. And the legal situation in Germany continues to make it difficult to save a financially troubled company.
Whoever takes on the job of restructuring under such conditions deserves to be well paid. But that is seldom the case. High salaries for board members of ailing companies are considered immoral, and supervisory boards often back down for fear of public criticism.
The hardest jobs in German business don’t go to the best managers but rather to the most readily available.
Success bonuses in double- or even triple-digit millions, which are common in the United States, are less likely in Germany, and often under the German Stock Corporation Act are not at all simple to justify. If investors pay such high bonuses for restructuring success, as was the case recently with ProSiebenSat.1 Media, a debate sparked by envy breaks out.
The hardest jobs in German business don’t go to the best managers but rather to the most readily available. The turnaround jobs go to men – very seldom to women – who have been looking for a new job for a long time, or who have been sitting on the sidelines dreaming of the chance to play boss, or who think they are capable of everything, although they have never really been in a position of leadership under difficult conditions.
Only exceedingly few German specialists, however, can claim experience in company restructurings. That is why the whole thing goes awry so often.
The author is a commentator on business and current affairs and former editor-in-chief at Handelsblatt. He can be reached at: firstname.lastname@example.org