Technically just as capable. Culturally? Not really. It's management that keeps the US from competing with Germany in that way, not engineering. How do you change the culture? I don't know.
This occasionally leads to some bizarre cultural "impedence mismatches". Volkswagen tried to organize a workers' council at their plant in Tennessee, and were rather dumbfounded at the blowback they received from both workers and politicians alike. The workers' councils are a normal part of their management process, they never figured it'd be a problem.
Of course this is very much a case of "physician, heal thyself". There are tons of BS management practices in the tech world - stack-rank is the first thing that comes to mind. And big tech companies like FB and Google are known to be colluding to hold our wages down. We're skilled workers, overall we're a prime target for organizing. But we're notoriously hard to organize because of our culture, and it's really tough to see how to change that.
Historically it's always been the case that workplace improvements are demanded, not given. The beatings will continue until morale improves, unless we act cohesively.
There are all sorts of things you can't build over here or in China because we don't have the people who can do it precisely enough.
Additionally, I often need to find precision materials or really high performance components and many times these are from German companies.
Take the humble LED as an example, perhaps the most industry leading company in GaN LEDs is in Germany.
Japanese can often offer the precision needed too but their companies are a lot less accessible and it takes a lot of time to build a relationship with them if you don't have one already. What they are really great at is that once you've built that relationship, they are usually very aggressive at supporting your needs.
In Germany, I think some of it has to do with the fact that they have these government supported institutes for industrial research like HHI (Heinrich Hertz Institute). This allows them to find markets for new and risky technology and then transfer those innovations to industry.