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Transportation Infrastructure & Trade: A Tale of Two Cities and Two Countries

By Elmore Alexander | 11/14/2016 | 6:25 PM | Categories: Current Affairs

I just returned from a week-long trip to Germany, where I was working with a German university on a partnership in global logistics—one that would link Bridgewater State University with universities in Germany, England, Malaysia, and Vietnam. Seeing the culmination of the U.S. presidential election from Europe was amazing. But that’s not where I want to go with this blog. Two of the highlighted issues of this presidential campaign were U.S. infrastructure (specifically, roads and bridges) and the impact of international trade on the loss of jobs. On both of these issues, the contrast that I saw between Germany and the U.S. was dramatic.

Infrastructure

Over 70 years ago, General Eisenhower experienced the German Autobahns first hand; and as president, he began the process of building our system of interstate highways. If you’re old enough to remember cross-country travel in the 1950’s or earlier, you remember travel that was slow and inefficient. Today’s highway system is quite different. The logistical marvels that we have experienced in the last 50 years clearly result, in large part, from our investment in our interstate highways and the trucking systems that they spawned. Unfortunately, underfunding and the resulting deterioration of our highway system jeopardize our future. 

The contrast to Germany is as stark today as it was in 1944.  German roads (whether between cities or around city neighborhoods) are marvels of quality and efficiency.  I cannot remember the last pot hole that I experienced on a German road.  Asphalt is pristine and smooth.  Traffic bottlenecks seem much less onerous than they do here.   Eisenhower would be shocked that today’s comparison of US and German roads harkens to the contrast that he observed during World War II.

If American roads are going to be great again, we simply have to make the kinds of investment that the Germans have been making for almost 100 years. If not, our logistical systems will simply fall apart. The good news is that President-Elect Trump talked about this issue throughout the election. Maintaining U.S. international competitivity in the upcoming decade will necessitate substantial investments in the repair of our roads and bridges. 

International Trade

I’m from a textile and furniture town in North Carolina (High Point). The town I was visiting in Germany (Reutlingen) shares very similar roots. Prior to World War II, Reutlingen was also a textile town. Today, High Point and Reutlingen are approximately the same size (100,000 inhabitants); but the similarities end quickly. 

Reutlingen saw the post-war future of manufacturing shifting to high technology and away from low-wage textiles. As textile production left Germany searching for low-wage opportunities in the American South and then Asia, Reutlingen retooled physical facilities and its workforce for high-wage, high-technology production. Today, the focus is on advanced-technology manufacturing, biotech, and medical and environmental technology. Reutlingen boasts a Bosch plant producing automotive electronics for Mercedes and other high-end automobile manufacturers. Reutlingen is reputed to be the wealthiest city in Germany.  It has a large vibrant downtown that is free of automobiles. The city becomes greener every time I visit.

The High Point economy is quite a contrast.  Only one manufacturer remains within the top 10 employers in the city—a school bus manufacturer.   Furniture manufacturing and textiles are pretty much gone.  The company that I worked for one summer during high school, Myrtle Desk, went out of business and the abandoned plant where I worked burned down a few years ago.  Downtown has been taken over by the furniture market; and with the exception of “Market Time,” the sidewalks are pretty empty.  The city has tried to build two malls in my lifetime—neither succeeded.  One has been converted into a church and office complex and connects to the retirement apartments where my mother lives.  The other is a shadow of what it was when it was built just 20 years ago and is gradually being turned into classroom space for the local university.  High Point is wealthy but far from the level of Reutlingen.  High Point, like many other US cities,responded slowly to changes in the world economy.   They emphasized low-wage/low-tech textiles and furniture manufacturing long after it was clear that such manufacturing was going elsewhere.  High Point would say that it has been victimized by free trade.  I’d disagree.

The contrasts that I saw on my trip were stark. Germany invests heavily in its roads and bridges. They may be the best in the world. Furthermore, Germany invests much more than we do in worker retraining and industrial policy, leaving it much less dependent on industries that are vulnerable to competition from low-wage countries. These are critical factors for the logistics industry. Our logistics system will not continue to operate effectively with crumbling roads and bridges. Likewise, we need to identify strategies that will expand high-value manufacturing giving us products that will compete both at home and abroad. 

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About Elmore Alexander

Elmore Alexander

Elmore Alexander is Dean and Professor of Management in the Louis Ricciardi College of Business at Bridgewater State University in Bridgewater, Massachusetts. Prior to joining Bridgewater State, he served as Dean and Professor in the School of Management at Marist College. Previously, Dr. Alexander was Dean of the School of Business Administration at Philadelphia University, Director of the Division of Business and Management at Johns Hopkins University, Associate Dean and Chair of the Management Department within the Kogod School of Business at American University in Washington, D.C. and Professor of Management and Director of the Fogelman Executive Center at the University of Memphis.



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