Germany Industry

Four years ago, Eckehardt Nesener was a laboratory chemist for the high-security hospital that catered to the Stasi--the secret police of former East Germany. Tucked away in a lush rural section of what was once East Berlin, the monolithic Stasi Hospital required a difficult-to-obtain security clearance for Nesener to enter. Today, the only credential he needs to furnish to the hospital guards is his business card as a salesman for Beckman Instruments Inc.

The rows of concrete houses in this desolate former military town are partly boarded up. Unused jets, once the pride of East Germany's air force, molder in the vast grounds where the Nazis developed their notorious V-2 rocket. A decade after German reunification, Peenemuende is among those places in the formerly communist east that are most in need of an economic boost. It's not all bad news here on Usedom island.

Four years ago, Eckehardt Nesener was a laboratory chemist at a high-security hospital that catered to the Stasi--the secret police of former East Germany. Tucked away in a lush, rural enclave on the outskirts of the former East Berlin, the so-called Stasi Hospital required a difficult-to-obtain security clearance for all employees, and no one entered the huge, stone edifice without the proper credentials.

It's called the Achilles' heel of the new economy, and nowhere is the weakness of delivery so apparent as in this city in the middle of the densely populated Ruhr River valley. Truck traffic through the 40-mile corridor connecting nearly 6 million people and many of Germany's heavy industries is so thick that the average drive time between the corridor's far points, the cities of Duisburg and Dortmund, is an aggravating two hours. Backups sometimes stretch 200 miles, spilling out of the valley.

The story of Foron, a former East German appliance maker that launched an award-winning, environmentally friendly refrigerator, makes for a good study in the opportunities and perils to be found in privatization, German-style. Foron started out not as a company, but as an East German brand name for refrigerators and washing machines, manufactured by two separate concerns near the Czech border. In the eyes of the Treuhand, the German privatization agency, both were real dogs, not worth saving.

For nearly three centuries, the region that today is marked on the political map as the German state of Brandenburg has stood in constant readiness for war. In the 18th Century, these pine-covered flatlands were the parade ground of Prussian military might; during the Nazi rearmament of the 1930s, they became the command and control center for Hitler's Wehrmacht.

Leading economists Monday forecast high unemployment, slower growth and rising inflation in the coming year as a unified Germany grapples with an economy that remains "deeply divided." In their biannual report, researchers at five key economic institutes outlined changes wrought by German unification and world events including the Persian Gulf crisis.

They're still talking about it. The roof-raising ceremony for Motorola's new $110-million cellular-telephone factory in Germany a few months back was one of a kind. "The sound systems were two stories tall. They were going till 5 in the morning," said Motorola country manager Norbert Quinkert, his pride at the successful bash mingled with a touch of mortification at the volume of the hooting and hollering.

In the midst of western Europe's worst recession since the end of World War II, Germany is struggling with slack demand at home and abroad, high labor costs and the huge expense of unification with the former East Germany. The Economy Last year, the western German economy shrunk 1.9 percent, the largest drop in the postwar era. Nationwide, gross national product fell 1.3 percent from 1992 to 1993. Unemployment has ballooned to a postwar high of 10.5%.

Already decimated by the effects of unification, eastern German industry faced further problems Wednesday after steel and metalworkers' unions voted overwhelmingly to launch the first officially sanctioned strike in the region for more than six decades. Union officials said the first stoppages could come as early as Monday in both industries. "They (employers) have only a few hours to reverse their position," warned Franz Steinkuehler, chairman of Germany's large metalworking union IG Metall.

When people talk about Einsturzende Neubauten's pipes, they don't mean the same thing they do when they talk about, say, Whitney Houston's pipes. In the case of the legendary German band, they really mean pipes--the thin metal ones they tap for percussion, the big black tube that's bowed and strung with a wire. These were just part of the arsenal when Einsturzende played at the Palace on Friday, part of a tour marking its 20th anniversary.

Stock prices are rising in Germany as middle-class Germans, anxious about saving for retirement, get the stockholding habit and foreign pension funds from the United States and other countries pour money into shares of German companies. Stocks of such major companies as Siemens, SAP and Deutsche Telekom have risen more than 100% in the last year.

With its announcement Friday of a $12-million Private Relief Fund, automotive giant Volkswagen became the first German company to accept a moral obligation to compensate Nazi-era slave laborers. VW, Europe's biggest car maker, cast its decision as a voluntary humanitarian gesture rather than a legal obligation, saying it was "morally called upon" to redress the wrongs of the company's World War II forerunner.

They're still talking about it. The roof-raising ceremony for Motorola's new $110-million cellular-telephone factory in Germany a few months back was one of a kind. "The sound systems were two stories tall. They were going till 5 in the morning," said Motorola country manager Norbert Quinkert, his pride at the successful bash mingled with a touch of mortification at the volume of the hooting and hollering.

Two of Germany's oldest industrial titans--Thyssen and Fried. Krupp steel and engineering groups--said Tuesday that they plan to merge, ending more than a century of intense rivalry. The companies, created by 19th century industrial barons from the Thyssen and Krupp families, built the weapons for Adolf Hitler's armies and later helped fuel West Germany's postwar recovery. If completed, the merger would create Germany's fifth-largest company, with sales of $34.7 billion.

Come the greening of America, householders in cities like Los Angeles may be able to buy refrigerators that don't use Freon, one of a family of cooling compounds long standard in U.S. models that work their way into the atmosphere and damage Earth's protective ozone layer.

Germany appeared Sunday to be heading toward its worst labor unrest in a decade after the breakdown of last-ditch talks to avert a strike in the manufacturing sector. The leadership of the 3.6-million-strong IG Metall engineering union will start receiving notification from regional branches this week that talks with employers have failed. IG Metall has already announced its intention to call a strike ballot Feb. 21.

Attempts by Chancellor Helmut Kohl's political opponents to capitalize on the growing economic and social misery in eastern Germany received a major setback Wednesday when barely a fraction of the predicted number turned out for what was billed as a major protest at Berlin's famous Brandenburg Gate.

The story of Foron, a former East German appliance maker that launched an award-winning, environmentally friendly refrigerator, makes for a good study in the opportunities and perils to be found in privatization, German-style. Foron started out not as a company, but as an East German brand name for refrigerators and washing machines, manufactured by two separate concerns near the Czech border. In the eyes of the Treuhand, the German privatization agency, both were real dogs, not worth saving.

For nearly three centuries, the region that today is marked on the political map as the German state of Brandenburg has stood in constant readiness for war. In the 18th Century, these pine-covered flatlands were the parade ground of Prussian military might; during the Nazi rearmament of the 1930s, they became the command and control center for Hitler's Wehrmacht.