Samsung moves into east Berlin

GINSENG COMES TO GERMANY

February 20, 1993|By Carl Schoettler | Carl Schoettler,Berlin Bureau

BERLIN -- At the big electronics plant in east Berlin, Bernhard Doering now takes ginseng tea in the morning with his new Korean colleague, Woongil Kim.

"It's one of our new tastes," Mr. Doering says.

East Berlin's electronics workers have been acquiring these new tastes since Korea's global Samsung conglomerate took control of the plant at the first of the year.

Hard work may be one of the new Samsung flavors.

"If you drink ginseng tea, you can do more work," says Mr. Kim. "Ten hours a day or more."

"We worked hard before Samsung came," Mr. Doering says, a little defensively. "Now we have to work harder."

The new Samsung property was once the Werk fuer Fernsehelektronik (WF), Works for Television Electronics, which made all of the color television tubes for Communist East Germany. It sold TV tubes and other electronic products to much of the East bloc, including the Soviet Union.

Nine thousand people worked for WF behind the Berlin Wall. The Wall and closed borders of the Iron Curtain shut out competition and insured East Bloc markets.

"We were the most modern factory in East Europe," says Mr. Doering, who helped build the color tube plant.

Now 52 and an office manager, Mr. Doering has worked at the electronics plant for 13 years. He looks a little rumpled, like the East German economy. Mr. Kim is 35 and he's called an administration executive. He's nicely tailored and splendidly confident of the future.

With the fall of the Wall and the collapse of communism, the state-owned WF complex found being best in the East wasn't good enough.

Eastern Bloc markets vanished and Fernsehelektronik couldn't compete in Germany.

"West German products were cheaper," says Mr. Doering. Companies his factory relied on as customers could get better deals on the world market.

Werk fuer Fernsehelektronik is pretty much a paradigm for what has sometimes been caustically called the "deindustrialization" of East Germany -- except maybe in its happy ending of finding a buyer. Employment at WF plummeted to 1,200 after the reunification; it's 900 now.

In the old east Berlin that was behind the Wall, the general unemployment rate is 13 per cent, which means 88,569 people are out of work, more than half women. Another 131,000 men and women are on short time, in make-work jobs.

At WF, and in virtually all former East German industries, the whole benefit package associated with the socialized work place was stripped away.

WF had kindergartens and day care centers, health services (WF ran a polyclinic), holiday camps for children, vacation bungalows for workers, a sports club and a culture club with a big theater in its own building.

"Alles weg," says Mr. Doering. "All gone." Treuhand, the German privatization agency, took control and began looking for a buyer.

Along with Samsung, Siemens and Grundig from Germany, Philips from Holland, Nokia from Finland and Bekoteknik from Turkey expressed interest.

Samsung won out with a pledge to invest $91.7 million, a guarantee to retain 800 jobs and a vow to employ 1,000 by 1997. It's Samsung's and Korea's first investment in the former East Germany.

Kyung Soo Yoon, who directed Samsung's Eastern bloc marketing from Vienna, helped with the acquisition. He's now managing director.

"I have lost weight and become a chain smoker," Mr. Yoon says. "I come to work early and go home late."

He explains that the east Berlin plant fits nicely into Samsung's global marketing system. It positions them nicely between east and west Europe.

"We have to manufacture our goods where we can sell them," he says.

Samsung will, in fact, invest more than $100 million in training workers and modernizing the factory. Samsung will keep the old line open while it builds new production lines, bringing the factory up to the state of the art in TV production. Mr. Yoon envisions a very modern, highly competitive factory here.

Although the technology is now "far below Korea," Mr. Yoon says, "if we complete our whole plan of modernization, it will be at the same level or better."

"These people were not familiar with efficient production," he said. "This company had no sense of cost."

Manfred Foede, the IG Metall union leader who mow represents Samsung workers, tends to agree.

In communist East Germany, he says, industries were deemed successful if they met the production goals of somebody's five- year plan. Costs were not a worry. If goals weren't met, figures were often juggled.

"We have 900 working [on the assembly line] where 2,000 worked before," Mr. Foede says. "The 900 produce as much as the 2,000. Samsung wants to raise it another third."

He doesn't thinks that's a bad thing.

"If the 900 produce another third, Samsun says they'll be competitive on the world market," he says. "And they must be equal to world trade -- or they'll close up."

East Germans have had a different work ethic. East German factories typically were very overstaffed, with lots of rest periods and time-off. Mr. Yoon suspects that as a result, East Germans don't like to work too hard.

"We have to teach them the harder they work, the better they will enjoy their welfare," he says. "That is principle of free-trade philosophy, yes?"

Mr. Foede, the union man, says perhaps the workers would prefer German management. But they learned to accept foreigners when the plant had a contract with Toshiba.

"They knew that the foreigners would come to teach them how to use new machinery.

"The big shock was when we [west Germans] came over," he says. "They say, 'who are Germans to tell Germans what to do!, "

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