As there was enough small news, but little big news in The Netherlands, it is again time for my SMS from Ernst: the feature that brings you the interesting news in bitesize chunks!
How inflation in The Netherlands ate away all wage increases since 2000
Yesterday, the Dutch Central Bureau for Statistics (http://www.cbs.nl/) presented the total increase of the collectively agreed wages in The Netherlands for 2011. And as can be expected in the Age of Austerity, the increase has been very modest. Here are the pertinent snips of yesterday´s CBS publication:
The increase in collectively negotiated wage rates was again modest in 2011. Just as in 2010, wages rose by 1.3% on average.
Collectively agreed wages rose by substantially less than inflation in 2011. Prices rose by an average 2.3% last year. This means wages lagged a full% point behind inflation.
Although wages rose modestly in 2011, the increase did grow in the course of the year. In the first quarter of 2011 wages rose by 1.1%, in the last quarter by 1.5%.
These snippets made me curious. How large the real wage increase (i.e. increase above measured inflation) has been during the last eleven years? Therefore I once again visited the wonderful Statline database of CBS and came with the following results.
Disclaimer: As the data for company owners/executives has been issued only once a year until 2010, I interpolated the data per month for 2000-2010. The data for 2011 has been extrapolated. All data is courtesy of the CBS.
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| Collectively agreed wages and Income of owners / executives vs inflation in the period 2000-2011. Data courtesy of www.cbs.nl Click to enlarge |
This picture shows clearly that the collectively agreed wages did hardly increase above inflation levels, during the whole period from 2000-2011. The only category of incomes that has been increased above inflation level is that of the owners/executives.
You can safely conclude that the purchasing power of people who took part in collectively agreed wages (the majority of workers in The Netherlands) didn´t increase since 2000, while their average uncollaterized debt, average mortgage debt and housing expenses (a.o. taxes based on value of their house) did rise substantially since then. In the process people might have felt richer initially, due to more available spending money, but they got poorer instead.
Supercar dealer Hessing defaults: was it the Age of Austerity? Or just poor judgment?
The Dutch dealer of thoroughbred Italian, German and British cars Hessing defaulted yesterday. Hessing Holding BV and all of its subsidiaries (car dealerships and yachting sales) have filed for bankruptcy on Monday, 9 January 2012, after the companies asked for suspension of payments the previous Thursday.
While Hessing might not be a household name in the United Kingdom and the US
The company was famous for its stunning glass-cathedral showroom (see picture) that was integrated in a sound barrier alongside the A2 highway near Utrecht
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| Hessing's showroom like a glass-cathedral at the A2 highway in The Netherlands ( picture courtesy of http://www.hessing.nl/ ) Click to enlarge |
Only one day after the default, there is already interest in taking over Hessing’s dealership for the thoroughbred car brands. Stern, a large dealer of a.o. Mercedes and Opel, started negotiations today and is very optimistic on the outcome.
While I initially thought that this bankruptcy was a result of the Age of Austerity coming to The Netherlands, this wasn’t the case. Sales of Rolls Royce in The Netherlands were actually above expectations in 2011. In reality, the company has defaulted on a real estate investment gone awry.
In De Bilt, a sophisticated village near Utrecht, the real estate branch of Hessing planned to build the first gated community in The Netherlands with houses and apartments for the very wealthy. Unfortunately, the forward sales of houses were so disappointing that one of Hessing’s partners, car dealer/importer Louwman (Toyota) withdrew its €10 mln investment. The inability of Hessing to settle this amount, led to its default yesterday.
This story proves once again that a combination of megalomania and bad judgment in investments can annihilate the healthiest company within days. Hessing should have known in advance that the market for extremely expensive houses and gated communities in The Netherlands was dead as a doornail before it even started. The signs have been around since 2006.
Dutch Queen Beatrix proves herself once again as the ultimate marketing tool
Almost one year ago, on 7 March, 2011 I wrote on the marketing abilities of Queen Beatrix of The Netherlands:
The Netherlands is a country with an excellent reputation on the production and export of hi-quality produce and goods:
· Seeds, flowers and agricultural produce,
· State-of-the-art consumer products
· Means of production, like microprocessors (NXP) and wafer machines for the chip industry (ASML)
· Hi-tec weaponry: guns, radar installations, war ships and submarines
· Instruments and tools for the nuclear industry
We build it very good and we export it even better, thanks to the best marketing tool a country can have: queen Beatrix of The Netherlands. The queen is the kind of person that opens doors for the Dutch industry that remain closed for other people and countries. Although the Dutch royal family seems like a “blast from the past”, it never ceases to amaze me how effectively they can operate, as a lot of leaders are attracted by the glamour of real royalty.
Last year, Queen Beatrix only could pay a private visit to Sultan Qaboos of Oman, due to the societal acrimony in this desert country on the Arabic peninsula.
Currently, however, Queen Beatrix is paying an official state visit to Oman, with in her court circle all captains of industry of The Netherlands. And boy, does it pay. The list of companies that received an order or might receive one is long and growing. The following information is retrieved from Het Financieele Dagblad (http://www.fd.nl/) and the local newspaper De Stentor (http://www.destentor.nl/):
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| List of real and potential orders for Dutch companies as negotiated during the visit of Queen Beatrix to Oman Click to enlarge |
I presume that this list will become much longer in the coming days. The Queen proves herself once again as the ultimate marketing tool for “The Netherlands ltd”.
Although I personally don’t feel a strong connection with the royal family, they are worth every cent from an economic point-of-view during visits like these.
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