German engineer rises from small shop to chief executive of six companies

March 28, 1993|By Carl Schoettler | Carl Schoettler,Berlin Bureau

RIBNITZ-DAMGARTEN, Germany -- Eberhard Tiede is a talented free-market entrepreneur, but he had to live 40 years under communism before he found that out.

Now, 2 1/2 years after he launched his business in the poorest part of what was then East Germany, he looks like a million dollars and in fact may be worth its equivalent in German marks. Sometimes he says he is, sometimes he says he's not quite.

His company, Firmengruppe Eberhard Tiede, is housed in a brand-new building in a small business park just outside this Baltic coast town. The faintly post-modern headquarters has marble floors, a glassed-in mini-atrium and original pastel drawings of the town and the north German landscape.

Mr. Tiede wears a well-cut charcoal suit, a sharp black-and-white striped shirt and aviator glasses.

Three years ago he was planning electrical systems for collective farms here in Mecklenburg-Vorpommern state.

In September 1990, a month before East and West Germany were formally united, Mr. Tiede, an electrical engineer, tacked an addition onto his modest home.

Ribnitz-Damgarten, a pleasant but not particularly distinguished town on a coastal plain rather like Maryland's Eastern Shore, has the unhappy distinction of being the city with the highest unemployment rate in the country, about 25 percent.

He put out a sign and launched an electrical contracting business with two employees. His start-up capital was 18,000 "East" marks, a small amount of a dubious currency. His first job was wiring a garden center in nearby Rostock.

Now he is the CEO of a complex of six companies. He has expanded into heating, sanitation and alarm systems. His companies employ 200 people. They have contracts all over Germany and as far away as Russia.

Mr. Tiede companies work on a housing project in Hamburg, a car dealership in Schleswig-Holstein, a high-rise in Hanover, all in the former West Germany.

In Russia, his firm is in the planning stage of a subcontract to provide electrical, heating and sanitary systems for two housing developments for Russian army troops returning from Germany.

Each Russian contract is worth 62 million marks, about $38 million. The project is financed by the German government as part of the deal to get Russia's soldiers out of Germany. Payment is in German marks.

"It's time to stop talking only of Germany. We must speak of Europe," he says. "Europe is one big problem. We must have a European solution.

"The future of [the former East Germany] will lay in East European markets," he says. He's recently returned from an exploratory business trip to Ukraine. But he likes to get paid in hard money.

His success comes in the face of conventional wisdom about the former East Germany: Workers do not work, costs are high, productivity low.

"There are many businesses [in the old East Germany] that are not worth renewing," Mr. Tiede concedes. He tolls a litany of gloom: overproduction in steel, machinery manufacture ending, the car industry sinking, coal gone.

"My development never would have occurred if I wasn't in construction. The building business will increase 67 percent in 1993."

All of his employees are from the Neue Bundeslaender, as he likes to say, meaning the new states that used to be East Germany. He doesn't use East and West Germany. He says Neue and Alte Bundeslaender, the alte (or old) being West Germany.

"We have German unity," he says. "One Germany."

The competition for qualified building trades workers in the east is stiff. But his Neue Bundeslaender people have "super" qualifications. Many worked with him in the old days when he planned electrical systems for collective farms. Eleven electrical engineers do planning and marketing for him now. His companies employ 21 apprentices today. They'll hire 17 more this year.

He finds it easier to work with people from the Neue Bundeslaender.

"They don't think so much of themselves and they are much easier to motivate," he says. "My workers know that we have to raise our standards to the level of all Germany."

He pays them decent wages. "A little less than in the Alte Bundeslaender but we live cheaper," he says.

Union wages for electricians in East Germany are 11.20 marks ($6.90) an hour, and for heating workers 14.10 marks ($8.65). Mr. Tiede's average pay is 15 marks. He pays as much as 18 marks and 18.50 marks for top people, about 20 mechanics.

In Germany, his total volume through February was 26 million marks, about $16 million.

"That's a lot of money," he says. "Better than ever."

In 1992, his firms altogether had a gross turnover of 36 million marks.

He told a German economic weekly he's a millionaire. But in his office he protests he's not. His money is all reinvested. His business is run on credit. He sounds like an American millionaire developer.

He totes up the assets at his headquarters -- the buildings, workshops, property -- and comes up with 5.5 million marks.

At 48 he's married, with four children and a granddaughter whose picture is over his desk. His wife, Dorothea, is a lawyer who handles personnel relations for the company. Three of his children work for him. The youngest still is in school.

He has acquired about 75 acres near Rostock. He's building a resort complex with apartments and a casino, barns and stables. He owns 22 horses. His family likes to ride. He's going to retire there.

"In about 20 years," he says.

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