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Europeans Revitalize Plants to Save Jobs

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Thu Feb 04 2010

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The soaring glass and iron Siemens factory here opened almost exactly a century ago. At first, it churned out electricity turbines, then munitions during World War II before being looted by the Soviets, which required it to be rebuilt at the dawn of the cold war.

Today, it is manufacturing turbines again - except these models are among the most advanced in the world, each one able to power all the homes in this city of three million.

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"It's not a museum; it's a workshop," said Michael Schwarzlose, a project manager at the plant.

The same might be said for much of Europe itself, despite American suspicions to the contrary. European companies may not be as nimble as their counterparts in the United States, but in moving to preserve jobs through the worst global downturn since the end of the war, they have forged a different path toward recovery.

They are making old plants more modern and effective rather than watching workers or companies deemed uncompetitive fall by the wayside.

European companies have paid a price: lower profits and productivity than their American competitors. But as long-suffering American workers face the prospect of a jobless recovery, many analysts believe the European model may deserve another look.

"American companies have been faster to adjust their work forces and quicker in protecting profit margins," said Gilles Moc, a senior economist at Deutsche Bank. But that does not mean companies on the Continent have fallen behind in innovation, experts say.

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Americans often assume newer, smaller companies are the engines of innovation and job creation - hence President Obama's decision to make a $30 billion program to encourage small-business loans a centerpiece of his jobs plan.

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