Next time you bring your car in for repairs, ask the mechanic who made the block heater. That’s the crucial bit of kit that makes the car engine start in the cold winter mornings.
If your mechanic says the heater is made by Webasto – as it is in more than half of all cars on the road – you are driving around a little bit of Neubrandenburg. Two hours north of Berlin, the city in the northeastern state of Mecklenburg-Vorpommern has weathered many challenges in the quarter century since the Berlin Wall fell.
From highs of more than 90,000, the population has dropped to just over 60,000 in recent years. Like many former East German cities, Neubrandenburg had to reinvent itself after 1989 – and fast. However, in the last years, a few interesting things have happened. First came a survey suggesting Neubrandenburg had the second highest quality of life in Germany. On its heels followed a study showing that Neubrandenburg had Germany’s second highest per capita income of €33,000.
For the prosperous Bavarians and Swabians, this was remarkable, if puzzling news. For German journalists who had written off this region for two decades, it was a big upset. For local mayor Paul Krüger, who once sat in Helmut Kohl’s post-unification cabinet alongside German chancellor Angela Merkel, Neubrandenburg’s revival is the reward of years of low-key work. His town hall, he says, is open for business – in all senses of the word.
“One key factor is that we didn’t chase the big attention-grabbing investments after 1990,” he says. While other eastern cities lost their way, spending money they didn’t have, Neubrandenburg built on its strong industrial tradition, something not even four decades of socialism could undermine.
Today, one of the city’s biggest employers and success stories is Webasto. Founded in Bavaria in 1901 and still family-owned, the company dealt with Neubrandenburg in East German times through its state-owned heating concern, Sirokko.
Sirokko specialised in making heating products for the icy extremes of the Soviet Union, some of which it sold to Webasto for its own Scandinavian customers. Knowing they had good products, Sirokko officials travelled to Munich a month after the wall fell in 1989 to meet Webasto owner Werner Baier.
By September 1990, a month before German unification, the deal was done: the Bavarians took over Sirokko and transferred their own heating operation north to Neubrandenburg.
Expertise
Cost savings and subsidies played a role in the move, the company says, but its decision to stay is down to the expertise of the company’s 500 skilled employees. They have quadrupled all productivity forecasts and now turn out over one million heaters annually, with a turnover of €350 million.
Webasto has invested €100 million and now delivers to car companies in 40 countries worldwide, as well as standalone products for some 8,000 specialist dealers.
For plant manager Andreas Dikow, Webasto has been a success twice over in Neubrandenburg: it has kept technical skill from East Germany's Sirokko in the city and overturned notions that four decades of socialism and state-owned companies were a toxic recipe for regional sloth.
“You cannot judge people’s work ethic by the region,” he says. “Eastern Germans are no less industrious than others. With the right training, flexibility and can-do attitude, there are good prospects for people in the east.”
Ahead of Sunday’s Berlin Wall anniversary, the German media has been full of articles about eastern Germany’s catch-up economy.
The headline figures say that eastern economic output remains at three-quarters that of the west, yet still hangs on a subsidies drip. But Dikow says economic statistics overlook the very different situation in – and successes of – the east.
Productivity figures, for instance, rarely take into account that many German companies now produce in cheaper eastern factories while, on paper at least, they sell their products from western front-office operations which write up in their western German column the sales of complex, eastern-built machinery.
“Eastern Germany is often the production extension of the mothership but that doesn’t show up in the statistics,” says Dikow, who specialises in post-unification productivity analysis.
At the smaller but no less ambitious, end of the business spectrum in Neubrandenburg is Owe Gluth. Named after its engineer founder, the company employs 55 people in manufacturing specialist equipment for district heating schemes common across Germany.
Two sides
Before 1989 Gluth, a trained engineer, worked by day in a state-run apartment construction company and, by night, demanded reform of East Germany via the local
Neues Forum
group. Like everywhere in Germany, he says, this year’s anniversary has seen a return of old arguments from 1989 in Neubrandenburg’s business community.
One camp says the Berlin Wall’s fall and subsequent unification saw eastern companies hung out to dry by Bonn and exploited by west German competitors. The other camp insists East Germany ruined itself long before 1989. For Gluth, both camps have valid arguments.
“East German companies had eroded themselves away – there was no investment, machinery was outdated and new ideas were dismissed,” he says. “We weren’t competitive and the environment, particularly around chemical plants, was ruined. East Germany wouldn’t have made it alone.”
Given that, he was sceptical of calls in 1989 for a reformed East Germany. At the same time, he accepts that the expedited path to unification made older east Germans easy targets for western German snake-oil salesmen, who snapped up companies and sold dodgy business advice.
Gluth had a more positive experience, learning his trade from a west Berlin heating company. To stand out in today’s crowded market, Gluth’s machines – energy substations for apartment blocks and family homes – are tailormade to suit customer wishes, with specially designed software and high levels of after-sales service.
Here in Germany's northeast corner, Gluth is proving that the classic SME or Mittelstand business model is not the monopoly of western cities such as Stuttgart.
Eastern companies such as Gluth’s see a real challenge in finding qualified engineers and other staff. This problem, familiar to companies around Europe, is particularly grave in a region where the post-unification collapse in birth rates is, 25 years on, still acutely felt.
Apprentices that do exist, says Gluth, can name their price in big cities like Hamburg and Munich. But he is optimistic that the region’s quality of life – a lower cost of living and spectacular scenery – can make up for a lot.
Other challenges are looming, he says: the Energiewende transition to post-nuclear energy and the end of the current round of unification funding in 2019. But, given the challenges of the last 25 years, Gluth displays a northern German placidity matched with an eastern German pragmatism.
"We have achieved a lot here in Neubrandenburg," he says, "but there's no reason to be complacent." Surviving regime change: Two centuries of chocolate Little has survived of the Berlin Wall, but not everything of East Germany vanished a quarter of a century ago.
Take for example Germany’s oldest chocolate factory, Halloren, which is celebrating its 210th birthday this year.
Founded in the eastern city of Halle in 1804, it has survived two world wars, half a dozen regime changes and four long decades of state ownership that almost ran the company into the ground.
Rescued from disaster in 1989 by a West German investor from Hanover, the company is now thriving with sales of €118 million in 2013, up almost a third in a year.
The public Halloren group employs almost 700 people and owns subsidiaries in Belgium and the Netherlands. This week it announced an ambitious investor partnership to crack into the US market.
Klaus Lellé, chairman of Halloren, hopes his company’s two-century tradition will be a selling point in foreign markets, though he concedes few in Germany care – or are even aware – that the country’s oldest chocolate maker comes from the east.
“The fact we’ve survived is no mean feat,” he said, “but that’s no reason to rest on our laurels. Our tradition lies in innovation, and we will keep working on new products.”
Of the company’s 180-item range, the most popular product is one of its oldest: the Halloren Kugeln, round chocolates based on the buttons of local saltminers.
Visit the company’s factory shop in Halle and you can buy these chocolates with fillings ranging from cappucino to eggnog. Another big seller: massive 1kg chocolate bars.
The chocolate museum upstairs relates the ups and downs of the company’s history and displays chocolatier creations, such as a full-scale chocolate room, created from 1,400kg of chocolate and 300kg of marzipan.
If you’re curious about Halloren products, they supply many popular own-brand products for German discount supermarkets, including Lidl’s cherry pralines and Aldi’s After Eight peppermint knock-offs.
