East German chemical firms need overhaul

Abstract

The chemical industry of former East Germany can be saved only by rapid privatization and investments of roughly $3.3 billion in its four main producers. Moreover, the industry—once East Germany's largest employer, accounting for nearly 330,000 workers—must be cut drastically to survive in the long term. These are the major conclusions of a study by the Treuhandanstalt, the German agency charged with privatizing firms in eastern Germany after reunification. The study also involved consultants from Arthur D. Little and McKinsey & Co. The four major producers, or combines, about which the Treuhand is concerned have their operations concentrated at Leuna, Buna, Bitterfeld, and Wolfen. These are basically in or adjoining the triangle bounded by the Saale and the Elbe rivers, and the Czechoslovakian border. This region, in which Leipzig and Halle are located, comprises eastern Germany's industrial heartland. Together, the four combines employed 111,000 workers in 1989 and accounted for nearly half of the ...