FREISING, Germany (AP) — The steady purr of the production line at industrial pump-maker HAWE Hydraulik SE plant would evoke envy in much of the industrialized world. It's the sound of the German jobs machine.
Just a year ago, HAWE, based in this Munich suburb, had cut its work force by one-third, and the remaining 350 employees were working at most three days a week.
But against all company forecasts, orders started rolling in over the winter as world trade reignited, and managers ramped up production of high pressure pumps and valve controls for machining tools, wind energy and solar power plants.
The company is struggling again — but now to find qualified workers to hand inspect parts and operate machinery on the factory floor.
German companies, roaring back from the recession ahead of many of their foreign competitors, are hanging out "Help Wanted" signs.
Right now, Germany's managers need 34,000 engineers, 28,000 cooks, 23,000 factory workers and 20,000 caregivers. Chancellor Angela Merkel has even declared full employment — the lowest level of sustainable unemployment without fueling inflation — a realistic goal.
German officials figure they will reach full employment at around 4 percent joblessness, meaning just about everyone who wants a job has one, and vacancies are mostly due to voluntary turnover.
Already, Germany's unemployment rate for 2010 of 6.9 percent is the lowest since reunification 20 years ago. That comparers with Spain, where unemployment is stuck at 20 percent and only likely to drop to 19.2 percent next year, and the Irish, facing a jobless rate of 13.6, are once again looking abroad for work.
The unemployment rate hit an enviable 2.4 percent in October in Freising — a city of 45,900 just six kilometers (four miles) from the Munich International Airport and where Joseph Ratzinger, now Pope Benedict XVI, was ordained a priest and later served as archbishop. Officials think they can squeeze the jobless rate down to an astonishing 2.2 percent.
"It can go lower. Maybe next month," said Michael Schmidt, executive manager of Freising's government employment office.
The prosperous south — home to carmakers Daimler, BMW and Mercedes as well as the Siemens conglomerate and scores of smaller businesses — have achieved on a regional level something close to Merkel's vision of full employment. Bavaria and Baden-Wuerttemberg have jobless rates of 3.8 percent and 4.4 percent.
The story of how the German labor market rebounded so forcefully from the world economic crisis is due to a combination of public and private efforts, experts say. They include the underlying healthy state of German industries, the impact of painful welfare cuts made years before and measures taken by the current government to manage the crisis.
"I think the best thing they did was even before the crisis, 10 years ago or so when they concentrated on improving production, keeping wage growth moderate and gaining competitiveness and market share. That was their consistent and underlying strength," said Marco Annunziata, the London-based chief economist for Unicredit.
The crisis has been a test of labor market restructuring earlier in the decade. A 2003 package of economic reforms and welfare-state trims included reduced job benefits and looser job protections. It was launched by former Chancellor Gerhard Schroeder and dubbed the Agenda 2010, the theoretical date when the benefits would be evident. Though fiercely criticized for hacking away at Germany's cherished system of social welfare, at least as measured by the labor market, some goals in the package seem to have come in on schedule.
When the slowdown arrived and industrial production slowed, part of the German government's reaction was to enact measures giving companies greater flexibility to keep workers on the payroll, but at reduced hours, partially subsidized by the taxpayer. Under the scheme, companies paid normal wages for the hours worked, while a fund administered by local government employment agencies paid a fraction, around 60 percent, of the balance of the work week.
"This strategy was really effective in putting German companies in a position to react quickly when global trade picked up again," Annunziata said.
Many companies, from HAWE to Siemens, openly credit the "Kurzarbeit," or short work, program with having helped them ride out the crisis before phasing it out this summer. It was also used by Daimler, BMW and many others.
The program let managers and workers agree from one day to the next if they would add or subtract shifts, a more flexible solution that idling entire divisions, as was done previously, said Thomas Heindl, manager of HAWE's Freising plant.
Instead of seeing its work force decimated, HAWE retained 350 workers who were ready to spring into action when orders suddenly picked up.
"We were very surprised that the crisis was overcome so quickly. We had to react very quickly," Heindl said.
But when it came time to add workers, Heindl saw a problem. In Freising, there are roughly four jobs available for every job seeker — the reverse of one year ago.
"With 2.4 percent unemployment, we must reckon with the fact that people who are qualified already have work," said Heindl said.
But that offers faint hope to qualified hydraulics workers from Spain or Ireland.
HAWE is looking to employ locally and will train workers for the job, if necessary. Apprenticeships run 3 1/2 years, including studies at a technical school, while mature workers might be able to learn the job in six months.
Heindl says the need for fluent German in the highly technical environment rife with paperwork makes hiring abroad difficult, and the local employment office says the high cost of living around Munich can deter relocation there, even from within Germany.
The employment crunch also is hitting the likes of Siemens, the electronics and engineering giant partially based in Munich. It's looking for some 2,400 engineers worldwide.
Siemens also recently signed an open-ended agreement guaranteeing stable employment to most of its German work force, and will pay bonuses of up to €1,000 ($1,365) to its employees worldwide in gratitude for their sticking with the company during the crisis. It also expects 2.7 percent raises scheduled for April to February for non-management employees.
The last crisis virtually came out of no where, so HAWE is hiring cautiously. Heindl plans to add some 20 workers in the coming months — but since it is hard to find trained applicants, he said he will likely hire through a private employment agency for the first six months.
If the short-term hires work out, they can count on longer-term employment, Heindl said, "even to retirement."
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