Trans-Atlantic Cooperation: German–American Relations in Times of Globalization

December 14, 2009

Volkswagen/Stadt Wolfsburg Adventsgespräch
Schloß Wolfsburg
Wolfsburg
Ambassador Philip D. Murphy

Oberbürgermeister Schnellecke,
Professor Dr. Winterkorn,
Herr Osterloh,
meine Damen und Herren,

vielen Dank, dass Sie mich zu Ihrem alljährlichen Adventsgespräch eingeladen haben.  Ich freue mich sehr, in Wolfsburg zu sein, wo der VfL Wolfsburg zuhause ist – der derzeitige deutsche Meister.   Alle Murphys sind große Fußballfans.  Als wir vor gut drei vier Monaten in Berlin angekommen sind, trugen meine Kinder Hertha-Trikots.  Seit damals fragen uns unsere Freunde in Berlin, ob wir uns nicht lieber eine neue Mannschaft aussuchen wollen.  Sogar mein Sohn hat mir gesagt, dass ich als Botschafter nicht parteiisch sein darf – ich weiß nicht, ob seine Freunde ihn dazu angestiftet haben. Er sagte, ich sollte immer, wenn ich eine Stadt besuche, Fan der Mannschaft dort sein.  Heute bin ich also in Wolfsburg und bin Fan des Meisters VfL Wolfsburg.  

Wolfsburg ist auch die Heimatstadt von Volkswagen, einem der größten Autohersteller der Welt.   In unseren beiden Ländern sind die Automobilhersteller treibende Kräfte des Wirtschaftswachstums.   Sie haben Einfluss darauf, wie die Welt uns sieht.   Sie stehen für Einfallsreichtum, Innovation und Geschäftseifer.  Sie sind Vorbilder unserer Industrie und erfüllen Generationen von Arbeitnehmern mit Stolz.  

[Thank you for inviting me to join you for your annual Advent meeting.  It’s a pleasure to visit Wolfsburg, the home of the VfL Wolfsburg, the current German football champions.   The Murphy family are all football fans.  When we arrived in Berlin some four months ago, my kids wore Hertha tee-shirts.  Since then, our Berlin friends are asking us if we don’t want to switch team.  Even my son has told me that as Ambassador, I should perhaps not take sides – I don’t know if his new friends put him up to it – and that whenever I visit a city, I should be a fan of that team.  So today I am in Wolfsburg and am a fan of the champions, VfL Wolfsburg.  

Wolfsburg is also, of course, home to Volkswagen, one of the world’s great car companies.   In both of our countries, automobile companies have been engines of economic growth.   They affect the way the world sees us.   They have stood – and continue – to stand for ingenuity, innovation and industriousness.  They are icons of our industry and a source of pride for generations of workers.]

Our beetles and Golfs, Mustangs and Corvettes, Cadillacs and Porsches have defined our national identities and our lifestyles.  The industry is like no other.  But to survive, the automobile industry will have to adapt to the future.   The past year has made that very clear.

We are just emerging from a global recession that was sparked by the most severe financial crisis since the Great Depression.  We have avoided the worst, but complex challenges still lie ahead.   That holds particularly true for the automobile industry. 

Volkswagen has responded to these challenges better than many of its competitors.   Professor Dr. Winterkorn, Herr Osterloh, I understand that Volkswagen is now a serious contender for the slot as the world’s largest auto manufacturer.   Congratulations!   VW’s 19.9% share in Suzuki as a strategic partnership so soon after it took a 49.9% share in Porsche and its huge planned mid-term  investments in China and Brazil as well as in the US show it is well on the way.   

Over the past year, we have learned just how interconnected our economies are – for good and for bad.  Volkswagen’s success is good for the American economy. 

We are delighted that Volkswagen has gone ahead with its plans to build a new plant in Chattanooga, Tennessee – returning to the United States after an absence of almost twenty years.  Volkswagen obviously hopes to increase its market share in the United States.  But the plant will be important to the economy in Tennessee as well.  Over $500 million in local contracts have been already awarded.  When completed, the plant is expected to create 2,000 direct jobs and 9,000 indirect jobs.  It will also create new possibilities for the manufacturers and suppliers of auto components.  In 2010, North America has been named "Partnerland" at the bi-annual International Suppliers Fair in Wolfsburg.  Working with Wolfsburg AG, the U.S. Commercial Service organized a very successful trip to the United States to recruit U.S. manufacturers to exhibit at this fair.   More than 150 US companies have already expressed interest in exhibiting their products at this important trade show.  This is a good example of the spinoff effects of bilateral investment.  The Chattanooga plant has the potential to create any number of new partnerships and investment possibilities that will benefit local economies in both of our countries.

We understand that the new VW plant in Chattanooga will set new standards in green production processes.  The cars that are produced there will also have to meet new standards.  President Obama has introduced new national auto fuel efficiency and emissions standards that will become effective starting in the model year 2012 – just as the new Volkswagen midsize sedan rolls off the production line in Chattanooga.  

The introduction of these new regulations is but one of an array of measures that President Obama has put into place since taking office to reduce greenhouse gas emissions.  At the center of these efforts, the Obama administration is working with Congress to pass domestic clean energy and climate legislation as quickly as possible.   The President also worked with Congress to secure over $80 billion to make clean energy a cornerstone of the American Recovery and Reinvestment Act.   This is the equivalent of decades’ worth of public sector energy investment.  There are plans to invest a further $150 billion in a clean energy economy over the next 10 years.  These investments will have a massive impact on transitioning the United States to a low carbon economy and reducing U.S. greenhouse gas emissions.   

This is one contribution that the United States is making to the global challenge of climate change.   In full knowledge that the United States has the largest historical emissions of greenhouse gases, President Obama has put aggressive reduction targets on the table.   We are prepared to assume our share of the responsibility.  And so, this is what we bring to the table: an unprecedented level of effort, a commitment to act domestically and internationally, in terms of financial and technological support as well as domestic emissions reductions. 

But action by the United States or Germany or by the entire developed country group nations is clearly not enough.  Significant action will be required by the major developing countries.  Over the next twenty years, 97% of the growth in emissions will come from developing countries –fifty percent from China alone.  There is therefore simply no way to preserve a safe and livable planet unless developing countries play a key role in the climate negotiations and join in taking collective action to meet this common challenge. 

The eyes of the world are now on Copenhagen.  Based on progress made in constructive discussions with China and India, President Obama believes it will be possible to reach a meaningful agreement in Copenhagen.  In an effort to drive progress forward toward a comprehensive and operational Copenhagen accord, President Obama will therefore attend the conference on December 18th.   We need to capture and build on the many pledges made by countries around the world over the past weeks and months. 

There is an emerging consensus at the talks in Copenhagen that a core element of any agreement will be a mobilization of funds – up to $10 billion a year by 2012 – to support developing countries, particularly the most vulnerable and least developed countries that could be destabilized by climate change.  The United States will pay its fair share of that amount – providing this assistance is not only a humanitarian imperative.  It must be part of a transparent and binding development accord that invests in the global economy and our common security.

We know that more is to be gained when countries cooperate than when they collide.  In thinking about the kind of cooperation that is now required of countries, I am reminded of the Marshall Plan, which I believe is the most significant diplomatic initiative in the history of mankind.   The Marshall Plan was revolutionary in that it required mutual cooperation among the seventeen countries that responded to the invitation to participate.  Many countries, and in particular France, were cautious about cooperating with Germany as a full partner of the West.  But the gravity of conditions in postwar Europe and the logic of the recovery plans convinced them of the importance of unity.  Today we seek that same kind of international engagement and commitment to address the challenge of climate change. 

Copenhagen will not be the end of the process.  To be successful, it will need to be part of a larger collective commitment to strengthen our global economy, raise the standard of living for all people and preserve a safe and healthy planet for future generations. 
Meeting the energy-climate challenge — supplying the expanded energy services required to create and sustain economic prosperity for everyone on the planet without wrecking the global climate on which well-being equally depends — is likely to be the toughest task that science, technology, and innovation policy will face  in this century.  We are under no illusion that this is going to be easy.  We, meaning the public and private sectors, from countries on the east, west, north, and south faces of our globe must work together to preserve our planet.  But by creating clean and efficient energy systems, we will also unleash a wave of technological innovation that will have the potential to generate new businesses and jobs, and to ensure economic growth.  The ultimate solutions to the climate challenge are therefore not in Copenhagen at the negotiating table.  They are right here – here at the VW plant in Wolfsburg, at the new state-of-the-art VW plant that is now under construction in Tennessee, and at many other plants, German and American, on both sides of the Atlantic and around the world. 

German-American cooperation in the field of wind and solar energy has already resulted in the implementation of alternative environmental technologies and the creation of more green jobs in both countries. That kind of cooperation sets an example for the world.  It too, like a successful agreement in Copenhagen, points the way to new pathways for the businesses that serve and the governments that represent people everywhere.  Such pathways derive from a other type of energy that will be vital to addressing climate challenges:  that is the creative energy of people who, through ingenuity, partnerships, and collaborations, are able to cut through complexity to arrive at practical solutions.

It is in that spirit that, at the end of this week, President Obama will go to Copenhagen.  It was also in that spirit that he went to Oslo last week to accept the Nobel Peace Prize.  He was deeply humbled and honored by the decision of the Nobel Committee.  He accepted the award as a call to action – a call for all nations to confront the common challenges of the 21st century.  In eleven short months, his administration has established a new era of engagement in which all nations – and all people – must take responsibility for the world we seek.   President Obama has infused a kind of magnetism into international politics that certainly makes my job as a relative novice to the world of diplomacy much easier.  We need to take advantage of that momentum.  

The international community has taken historic steps toward reforming our international economic architecture.  We must continue to stoke our economic recovery and pursue growth that is both future-oriented and sustained.   We simply cannot return to the same cycles of extreme behavior – whether it be obsessive consumption, excess leverage, untethered speculation or endless proliferation of structural products – that led to a severe global recession.  Fixing the system is essential to preventing another crisis of similar magnitude.  For years, the IMF and others have warned that huge global imbalances were unsustainable, highlighting among realities, that the United States cannot continue to run immense trade deficits.  That means that even countries like Germany, the "Weltmeister" of exports, need to ask themselves where future growth will come from. The U.S. consumer is now saving more and consuming less.  Surplus countries such as Germany will need to look at how to reduce their reliance on exports and increase domestic demand. This was a major commitment leaders made at the G-20 Summit in Pittsburgh.

At the same time, we need to look at more robust opening of global markets for goods and services.  Like Germany, the U.S. is committed to the successful conclusion of the DOHA trade round.  We believe that the DOHA trade round can be successfully concluded in 2010 but that substance should be the key, not timing.   Core areas which still need to be addressed are related to market access in the negotiations on agriculture, non-agricultural market access, which of course includes automobiles and services.  We need clarity as to what level of market access the large, advanced developing countries such as China, India and Brazil, are willing to offer.  We believe that whatever offer they make has to be in accordance with their expanding role in the world economy.  

One of the most crucial issues on the international agenda is the way forward in Afghanistan and Pakistan.  On the 1st of December, President Obama laid out U.S. strategy considerations in the region and a timeframe for a transition to Afghan responsibility.  Soon after, NATO partners met in Brussels to discuss key priorities for Afghanistan.  The common goals remain: namely, to disrupt, dismantle and defeat al-Qaeda.   Complementing President Obama’s recent announcements regarding Afghanistan and Pakistan, ISAF Foreign Ministers reiterated their collective objective to hand over lead security responsibility to the Afghan forces. 

We understand Chancellor Merkel’s decision to put off a decision on troop increases until after the Afghanistan conference in January.  It is up to Germany what it chooses to contribute to our common effort.  The question is often posed: “What does the U.S. expect from Germany?”   The question should be: “What is needed in order to achieve success in the north of Afghanistan, the area in which Germany is playing a leading role?”  Germany has the first hand knowledge to answer that question.  Germany knows the environment and the exact nature of the challenges that need to be met and the problems that need to be solved.  Germany has been an outstanding partner in a long and difficult mission and we have every expectation that they will continue to be so in the future.  Our common security is at stake. 

The issue of Iran's nuclear activity is another issue that requires a strong international response. For a number of years, Europeans pressed us to become more engaged, arguing that our absence created a void that doomed discussions to fail; as a military and economic superpower, there were certain aspects that only we could bring to the table.  We are bringing them now. We are talking to Iran. We are present at meetings that take place between the international community and Iran. In past years there have been significant transatlantic differences on how to deal with Iran. That is not the case today. We are united in our resolve to preserve the integrity of the international nonproliferation regime. The Iranians are well aware that this is a two-track process. We continue to urge them to work with us on the first track of diplomacy and engagement.

Putting aside the current hard issues of international diplomacy let me conclude with some examples of the kind of people-to-people engagement that fuels the German-American partnership. 
Education is an important issue for both our countries.   It is one of the most important determinants of our future.  Volkswagen has long shown a strong commitment to education.  In 2008, Volkswagen donated an international school to the City of Wolfsburg in honor of its 70th anniversary.  The school opened this fall.   It features small classes and highlights independent learning.  I understand VW will continue its involvement by leading classes and seminars on on how a large company works.  This is the first time a German company quoted on the stock market has cooperated with a community to build and finance a school.  I understand it has already begun to support Hamilton County Schools in Tennessee and the University of Tennessee.   This is an example of how corporate responsibility combined with synergy produces a result that is greater than the sum of its parts, or as I sometimes say, 1 + 1 = 3,Professor Winterkorn, again on behalf of the Embassy, please accept my congratulations.  This is perhaps even more important than being number one in the automobile industry. 

Finally, I am pleased to see that in addition to increased contacts made possible by bilateral investment in the automobile industry, the Wolfsburg Kunsthalle is now featuring a wonderful exhibit by an American artist, James Turrell.  Oberbürgermeister Schnellecke,  thank you for supporting the cultural aspect of our relationship.  Although I have not had the chance to see the exhibit yet, I have heard nothing but positive reports. 

Meine Kollegen in der Botschaft bringen mir soziale Medien und neue Kommunikationswege näher.   Bitte sagen Sie mir über meine neue Facebook-Seite, was Sie von der Ausstellung halten – oder von einem der Themen, die wir heute Abend angesprochen haben. 

Vielen Dank für Ihre Aufmerksamkeit.  Lassen Sie uns in Kontakt bleiben.  Frohe Weihnachten Ihnen allen. 

[My colleagues at the Embassy are educating me in social media and new modes of communication.   Please let me know via my new Facebook page what you think of the exhibit –or any other aspect of what I have touched upon this evening. 

Thank you for your attention.  Keep in touch.  Merry Christmas to you all.]

As prepared for delivery.