The U.S.: Where Europe comes to slum
Its leading companies are investing in the U.S. because they can do things here they would never think of doing at home.
The newest slumlord in Los Angeles is a pillar of German capitalism. Earlier this month, the city attorney's office filed suit against Deutsche Bank, the world's fourth-largest bank, for letting many of the more than 2,000 L.A. homes it has foreclosed on descend into squalor and decay.
A yearlong city investigation of the properties on which Deutsche Bank foreclosed turned up tenants compelled to live in crumbling apartments the bank would not fix, houses taken over by gangs, faucets from which water either wouldn't flow or wouldn't stop, and the occasional unidentified dead body. Nothing, in other words, that would be allowed to happen to bank holdings in Frankfurt, the neat-as-a-pin German city that is home to Deutsche Bank and much of the rest of German finance.
Deutsche Bank responded to the suit by blaming the loan servicers that were supposed to have maintained the bank's properties. But City Atty. Carmen Trutanich insisted the blame belonged with the owner. "We are not going to allow them to play the shell and nut game," he said.
But slumming in America is fast becoming a business model for some of #000000 !important; text-decoration: none;">Europe's leading companies, and they often do things here they would never think of doing at home. These companies — not banks, primarily, but such gold-plated European manufacturers as BMW, Daimler, Volkswagen and#000000 !important; text-decoration: none;">Siemens, and retailers such as #000000 !important; text-decoration: none;">IKEA — increasingly come to America (the South particularly) because labor is cheap and workers have no rights. In their eyes, we're becoming the new#000000 !important; text-decoration: none;">China. Our labor costs may be a little higher, but we offer stronger intellectual property protections and far fewer strikes than our unruly Chinese comrades.
Source and full article: Los Angeles Times 15 May 2011
