German giants hire abroad and cut at home

GERMANY'S BLUE-CHIP companies have sharply increased their numbers of overseas employees at the expense of domestic workers, an influential survey will reveal today, writes Francesco Guerrera.

The study by the German foreign investment specialist Urban Publishing will show that in the past 18 months staff employed by large German groups away from their homeland rose by 13.5 per cent to 1.9 million, but the troubles in the domestic economy and political uncertainties led to a 1.2 per drop in the number of German-based workers to 3.3 million.

The findings will reinforce the arguments of German firms which have threatened to move some of operations abroad in protest at the centre- left government's planned tax reforms.

A fortnight ago the insurance group Allianz warned that it could base its headquarters in another European country if the government increased the fiscal pressure on financial companies. Allianz is one of Germany's top 10 overseas employers with over 64,000 staff working abroad.

The insurer's threat was echoed by energy and industrial group RWE, which said it was reviewing the scope of its German-based investments.

The study, carried out among 263 large firms, found that Siemens, the industrial giant, is Germany's largest overseas employer with over half its 420,600 staff working abroad. In the past 18 months Siemens increased its overseas staff by more than 40,000 to 220,000, despite the planned closure of a microchip plant on Tyneside with the likely loss of 1,000 jobs.

In the same period, Siemens's German workforce fell by 3,000 to 194,000.