Recession Batters German Steel

HANDWRITTEN letters from Patrick and his fellow third-graders are taped to the entrance to the Krupp steelworks here in Duisburg-Rheinhausen: "Dear Steelworkers, I think it's a scandal that you can't work at Krupp. I wish you lots of luck in finding new jobs. Patrick (Class 3b)."

Union members staging a 24-hour vigil appreciate the school children's solidarity, but it's not new jobs they want.

"This works has been running for 95 years and it should continue running," says Heinz Albert with great vehemence. A crane driver, he's the third generation of Alberts to be employed at this steel plant, whose planned closure was announced March 9.

Five years ago Mr. Albert and his fellow workers were able to prevent the closing of Krupp Rheinhausen by putting up a fierce, 160-day-long fight. It's far from certain they will succeed this time, although their loud protests have gained them considerable national media exposure in recent weeks.

"In '87, the general environment in the steel industry was OK, it was just Rheinhausen that they wanted to shut down. Now, German steel itself is no longer in the best shape," says Reiner Schuh, who works for the worker advisory council at the Rheinhausen blast furnace.

To refer to German steel as "no longer in the best shape" is an understatement. In order to survive a flooded European market in which falling prices are the norm, the German Steel Federation estimates the industry will have to shed 40,000 more jobs by 1995 - 30,000 in west Germany and 10,000 in east Germany. Germany is the world's fifth-largest steel producer and the largest in the European Community (EC).

The coming cutbacks mark the final chapter in the history of the Ruhr valley as Germany's mighty steel and coal region, experts say (see related story, below).

The Ruhr valley "is undergoing breathtaking deindustrialization," says Hans Heinrich Blotevogel, an expert on the Ruhr at the University of Duisburg. "I'm convinced that the steel industry will drop way off - it's just a question of time. Only a small bit will be left," he predicts.

German steelmakers blame most of their troubles on outsiders: recession in the industrialized world, and now in Germany itself; subsidies propping up inefficient steel producers in Italy and Spain; restricted markets in the United States; and cheap East European steel triggering a drop in West European steel prices.

"The situation has never been more dramatic," said Krupp chairman Gerhard Cromme in a Der Spiegel interview last month. "The European steel industry is being affected by an unprecedented quantity and price retreat."

Last month, EC industry ministers and the European Commission agreed that 30 million tons of crude steel and 20 million tons of rolled steel must be cut from EC production in order to reduce overcapacity. They could not agree, however, on which countries should do the scaling back.

Fingers were pointed at Italy and Spain, but also at east Germany's inefficient steel industry - or what's left of it. Since reunification, employment there has plunged.

For social and political reasons Bonn feels compelled to assist in modernizing the remains of east German steel. Now it's west Germany's turn to cut back, though that is nothing new to the industry. Steel companies, aiming at efficiency, have been trimming jobs for more than a decade.

They are also moving away from the production of raw steel toward high-quality and finished steel products that directly supply the auto industry. They have consolidated (Krupp bought Hoesch AG in 1991) and diversified.

Yet these measures are of small comfort to the 2,000 workers in Rheinhausen who will probably lose their jobs. "One day we're working overtime, the next we're told we're going to have to close. It's schizophrenic," Mr. Schuh says.

Why all the fuss in Rheinhausen? Raimund Wollnik asks. Mr. Wollnik, director of the Duisburg unemployment office, says that "quantitatively speaking, [Rheinhausen's] 2,000 is not much. That's how many people register here every month!"