German Town Wants Factory Back

HERZBERG, Germany â€”  In the late afternoon, after the shops have closed and the egrets have returned to their nest in the old smokestack, the streets are quiet except for the rattle of gray-haired women balancing groceries on handlebars and pedaling bicycles along the Black Elster River.

Their hair flying, their bikes’ spokes shining, the women of this town have glided through wars and decades of communism; they’ve raced through history with loaves of bread and bunches of flowers. If the women stopped pedaling, many here believe that the town might vanish amid the loamy plains and potato fields.

But these days Peter Schulze reckons that women on bikes are not enough. Grohe Water Technology has shut down its century-old bathroom fixture factory, firing all 305 employees, including Schulze, the union representative. Unemployment has jumped to 28%, and Herzberg has become another cautionary tale of a former East German town bedeviled by globalization and this nation’s reunification failures 16 years after the Berlin Wall fell.

“We did good work and they canned us anyway,� says Schulze, a man with a deep voice and pockets full of discouraging statistics. “This town can’t take much more. My son’s 23 years old, and the devastating thing is he’s the only one in his school class who’s still here. The motto is ‘go west’ to the jobs. The east is turning into a nursing home for old people.�

Here in the east, where unemployment is more than double that of the west, the sting of capitalism has extinguished the euphoria and economic glimmer that flared at the end of the Cold War. There have been some successes, but the east is blighted by closed schools and broken factories. Populations in many villages have dwindled, and industrial jobs have been replaced with low-wage employment at call centers and cleaning services.

German Chancellor Angela Merkel is a daughter of the East. She grew up longing for bluejeans and Beatles records, and many say she is sensitive to the region’s problems and eccentricities. Others are less convinced, predicting that the partisan politics of the chancellor’s coalition government will fail to rejuvenate the region and reform the nation’s economy.

Amid this debate, towns such as Herzberg are increasingly suspicious of anything coming from Berlin and points west.

The bathroom fixture factory is a case in point. Founded in 1900 by a local plumber and his partner, it survived wars and was state-owned under communism. Grohe bought the factory in 1991, only to sell it and other Grohe mills to British investors eight years later. The private equity firms of Texas Pacific Group and Credit Suisse First Boston became the owners in 2004, then announced that the Herzberg factory would be closed and the work moved to Thailand this year.

The town organized a protest march. Schulze even slipped into a black suit and made a plea in the town square. Whistles and banners did not alter the decision, however. People here knew it was over when a few Grohe employees flew to Thailand to teach workers there how to do their jobs for a fifth of their wages.

“The loss of that factory is a catastrophe. Families survived on it for generations,� says Renate Timm, pastor of St. Mary’s Lutheran Church, who listens to Johnny Cash and collects old baptism dresses. “Those of us who grew up in the East saw the West on TV. We saw capitalism. We saw unemployed people. We just didn’t imagine it would ever happen to us. Still, I don’t like whining. We’re free and we can’t forget that.�

St. Mary’s rises over the town. Built in the 1300s, its gray bell tower was once home to a caretaker too feeble, or too lazy, to descend the spiral staircase. He dropped a bucket down and hoisted up his food instead.

Timm knows Herzberg’s folklore like she knows the Lord’s parables, but these days she’s busy restoring the church, where workmen coax hidden murals from the grime and a silver pipe organ glows in the swept morning dust.

“Sometimes you have to accept life the way it is,� says Timm, standing in the light from the stained-glass windows. “You can’t say, ‘Life would be better if I had this or I had that.’ People must learn that not every town can be the center of everything.�

Renovation money once streamed into town -- more than $1 trillion has poured into the east since 1990. Houses were painted, roofs patched and the drab colors of communism became pastel facades, as if prosperity waited behind every door.

But life doesn’t often stay pretty for long. The construction industry crumbled first, sending unemployment up and laborers to Belgium and the Netherlands for work.

The ripple hit everyone, even at City Hall, where Mayor Michael Oecknigk mentions how his two daughters had to leave home to find jobs, and how Herzberg needs a highway or it will be forgotten. He’s an optimist with a part-time secretary and a budget $600,000 lighter since the Grohe plant closed in December. He sounds like many mayors in the east.

Since he took office more than a decade ago, the town has lost at least one-third of its business tax base and has had to lay off nearly 200 employees. Every year, lists are made and programs scratched out, but Oecknigk has been able to save the zoo, library, planetarium and swimming pool.

“We lived modestly and we would survive with some small successes, but the Grohe factory closing really hit us hard,� says the mayor, who wears a pinstriped suit and has a crucifix hanging over his desk. “It was our anchor. It gave money to our soccer club and our charities.

“I don’t blame Grohe. Aren’t we all small capitalists? Aren’t we all going to the gas station with the cheapest pump?

“Grohe is not the fault of bankers and businessmen, but of politicians that gave huge tax breaks to get foreign investment. They invited these locusts, these foreign investors in here. But then that investment left us with nothing.�

The mayor says the Elster River was once black with communist industrial soot. Now it is clear as it flows past farms and bends toward the water plant that used to be a Nazi radio station. But Herzberg needs children to sustain its population of 11,000. The mayor estimates that 600 fewer babies were born in the last decade than the previous one, and that the children who are there will leave if jobs keep trickling away.

Her glasses snug on her nose, her hair piled high, Ingeborg Kunze opens the door and lets her cat into her cigarette and liquor shop. Kunze says it’s the personal touch that matters these days; she knows her customers’ names, what they read, smoke and sip when the sun goes down. She looks out the window to a nearly empty sidewalk. People wait at the food pantry around the corner to collect state-subsidized groceries.

“If the baker and butcher go out of business, that’s the end of me,� Kunze says. “I couldn’t survive as it is without selling magazines and lottery tickets. You shouldn’t look behind the facades around here. There are people very good at hiding how poor they are.�

Peter Schulze stands in front of a tavern the color of dishwater. Born into communism, raised to believe that as long as there was a state there was a job, he never gave much thought to world markets, 28% profits and the cruel gyrations of globalization. But today he’s a union leader without a shop, a man who with some buddies and the mayor is trying to find a buyer for Grohe. He walks through the tavern door past hanging coats and steps into a side room.

“We even offered to produce under Chinese conditions. We would have worked for less pay,� says Schulze, sitting down at a table with other workers, still remembering the day the Grohe lawyer appeared with 305 pink slips in a briefcase. “There are no other jobs within 100 kilometers. We can’t sell our houses. Who would buy them? All of us here have worked at Grohe for 25 years.�

“My husband and I both worked there,� Rita Dueben says. “We’re rooted here. Our children go to school here.�

“What use is freedom won from communism if you can’t use it?� says Schulze, who finds it hard to believe that a company would shut down a factory full of new equipment. “Four schools have closed in this region in four years. The mayor may have to close the library and the swimming pool.�

The conversation quiets. The beer is gone and no one cares to tolerate the euphemism of “downsizing� any longer.

Schulze and his crew put on their jackets and walk outside, shaking hands and going in different directions as if leaving a secret meeting.

Shopkeepers fold their aprons and lock their doors. The town belongs to the women on bikes, who sometimes stop and talk, but mostly pedal toward home.