In a charming valley on the Saale River sits one of the few gems of East Germany`s crumbling industry-Carl Zeiss Jena Co.
The firm-known the world over for its fine precision instruments, binoculars and microscopes-has survived two world wars and 42 years of communist rule. But it may not survive German unification.
”The fear is that our production techniques are so inefficient that there will have to be a large number of layoffs,” engineer Wolfgang Gruhl said.
On July 1, as East and West Germany merged their economies, Zeiss once again became a private corporation. It must face the same vagaries of the marketplace confronted each day by companies in Munich, London, Tokyo and New York.
Everyone at the firm, from the secretaries to the directors, worries whether Zeiss is up to the task. If Carl Zeiss Jena can`t make it in the capitalist world, it seems doubtful that many or any of the other 8,000 East German companies would survive.
At Zeiss, where founder Carl Zeiss began making microscopes in a small workshop 144 years ago, employees are gripped by the uncertainty that pervades East Germany as the country attempts the overnight transition to capitalism.
”This is the negative side of the revolution,” said Gruhl, 47. ”The West German mark is not such a wonderful thing if in the end you lose your job.”
Nationally, unemployment is rising dramatically. The East German government reported 142,000 of its 9 million workers were out of work at the end of June, an increase of almost 50 percent from the month before. The unemployment rate is only about 1.5 percent, but that`s in a country that under communist rule officially had zero unemployment.
So far, very few at Zeiss have lost their jobs, though the company has gone through a dramatic reorganization. At the end of 1989, when Zeiss had sales equivalent to about $3 billion, it had 62,000 employees. Today, it has only 40,000 workers.
The goal is to bring employment down to 30,000 within a year.
Most of those who have left so far-approximately 20,000-did not work for Zeiss` core businesses in Jena. They were part of the camera and
microelectronics operations based in Dresden. Those businesses have been spun off into separate corporations and will have to struggle on their own to survive.
The company hopes the other jobs can be eliminated through attrition and retraining. It is working with the government to retrain 5,000 people for work in new service companies and smaller manufacturing companies expected to spring up in the new market economy.
”I can`t really say whether people will be laid off or not,” said Zeiss spokeswoman Margrit Richter. ”Perhaps we`ll have to jump that hurdle, but we really don`t want to.”
Laid-off workers get unemployment checks worth 68 percent of their take-home pay. The average East German brings home about $500 a month. Zeiss workers, an elite even under communism, take home $600 to $900 a month.
Layoffs would be very painful in Jena because it is a company town and Zeiss has remained a family business.
Gruhl, assistant manager of the microscope assembly department, has worked there for 30 years. His father worked 40 years for Zeiss. ”It`s the same for almost everyone you see here,” he said.
On the shop floor, 28-year-old Michael Wuetzer has been with Zeiss 10 years. His father has been with the firm 30 years. Nearby sat Rolf Pickelmann. He`s been with the company for 30 years. His 19-year-old son now works there. And down the hall was 35-year-old Bernd Kraft, a Zeiss employee for 19 years. His wife, Martina, works there, too.
At least one of every four residents of Jena works for Zeiss. The main factory takes up a square block in the center of town. The company has about 30,000 employees still in Jena, a city with 107,000 residents.
For them, as for all 16 million East Germans, events are moving at dizzying speed, as though in a film that has been pushed to fast-forward.
Nine months ago, the communists were firmly in power. Today, all of the government companies have been placed under a trustee whose job it is to privatize them as rapidly as possible.
Technically, Zeiss, too, is under control of the trustee until its legal status can be clarified. It has applied to the government for the return of the assets that were nationalized in 1948.
It also would like the return of the profits the government confiscated over the last four decades, but there is faint chance of that since the country is deeply in debt. Zeiss would like the money back to modernize production lines.
On a shelf in his modest office, Gruhl has a box full of microscope pieces-fittings and flanges, plates and assorted parts. They are all rejects- the result, Gruhl said, of working with old and worn machines. Each mistake must be corrected by hand.
”We often do things twice or three times,” he said.
There`s an array of other problems, Gruhl said. For example, the company produces 80 to 90 percent of its own parts, which means it can`t cut costs by seeking the lowest bids from outside contractors.
In addition, there is virtually no backlog of parts. Production is done on a monthly schedule, but most of the parts don`t show up until the end of the month. At the beginning of the month, workers sit around doing nothing. At the end, they must work 12 hours a day to meet quotas. In these hectic periods, the rejection rate because of mistakes is as high as 35 percent, Gruhl said.
Almost all the records are written by hand. Zeiss couldn`t afford even a simple computer to do inventory.
On the surface, it would seem Zeiss might have a special advantage over other companies, a white knight waiting in the wings. In Oberkochen, West Germany, there is another firm named Carl Zeiss. It was formed after the communists took over the original factory in Jena.
In June, the companies signed an agreement that said that they would like to merge but only after the East German company had proved that it can make it on its own. The merger is to take place in four years, if the Jena company survives.
