How the Treuhand smashed the heart of East German society

The engine builders had recognized the signs of the times, and they were quick: on April 5, 1990, the formerly state-owned company Elektromotorenwerk Wernigerode (Elmo) was registered as a GmbH with the number 002 in the register of the Treuhandanstalt and the former combine Elektromaschinenbau, to which the plant owned as a joint-stock company.

The registration number 001 of the Treuhandanstalt founded five weeks previously by the Modrow government was reserved for the empire of Alexander Schalck-Golodkowski – the Koko. The Commercial Coordination department in the GDR Ministry of Foreign Trade had to use capitalist methods to generate currency for the currency-strapped state. An area with an absolutely special position – clearly the 001.

But the first normal operation in the GDR to be converted into market-economy ownership was Elmo. A pioneer: Elmo was also the first company in the East to take over a West company with its West sales company, and Wolfgang Beck, who was once the youngest director of operations in the GDR, had become one of the new managing directors of the GmbH.

Motors for Trolli to opencast mines

The company had reason for self-confidence: engines were supplied to 47 countries, including all of today’s EU countries. The whole range was on offer, from small to huge: engines for the GDR lawnmower Trolli, for agricultural machinery, printers, large opencast mining equipment, machine tools, rail vehicles or ships – all products that helped establish the reputation of the GDR as an industrial country.

With farsightedness, Wolfgang Beck had prepared his top company in good time for the new era after the political upheaval of 1989. Already three weeks before the elections of March 18, which brought Lothar de Maizière’s government into office and with it an accelerated course towards reunification, the conversion of public property into market-economy forms of property had already been initiated. Beck and his comrades-in-arms still had a reformed GDR in mind. The election result brought reunification at a gallop into focus.

In other companies in the GDR, workers prevented the transformation by protesting against “old cadres, turncoats and cliques”; Beck had managed to convince “his people”: the new works council approved the conversion, and VEM-Elektromotorenwerke GmbH Wernigerode was launched. The most important goal: preserving jobs.

The western rivals were weak: “We produce more engines in one day than the entire Federal Republic,” Beck stated at the time. He saw his company as well positioned: “We supplied motors certified by the Physikalisch-Technische Bundesanstalt in Braunschweig to all industrial sectors, even in the west.” But he soon realized for the first time that this success could be directed against the company: “It was Unfortunately, it is not possible to foresee what desires this exceptional position will arouse.”

An authentic testimony

All of this can now be read – factually, knowledgeably, without whining, but nonetheless written down with heart and soul in the book “Everything has an end – including the market economy”, with the subtitle: “Wolfgang Beck, the last director of the VEB electric motor factory Wernigerode (Elmo ), tells of the planned economy and the economic collapse and awakening”.

The topic may seem too specific, Wernigerode maybe too remote. But it would be a mistake to dismiss the book as a niche product for GDR experts. Because in its authenticity it is a unique testimony not only of the East-West transformation experience, but above all one from the heart of the vanished state. Because that was what the companies were: a second home for millions of men and women, much more than a place of work and production. The companies formed their own cosmos, created community and offered security – hard to imagine for those socialized with capitalism. Many still mourn it today. A good part of the phantom pains of former GDR citizens stem from the loss of this lost everyday world.

Phantom pain of GDR citizens

Beck tells an example of the inside view of such a state-owned enterprise (VEB), the GDR in a nutshell. You can see how the GDR worked internally, how everything was interwoven, how the party steered and controlled everywhere, educating and protecting people at the same time. He describes how careers were steered, how the socialist competition ran – youth objects, brigade life, traditional cabinet, the party apprenticeship year.

info box image

The book

Author: dr Wolfgang Beck

Title: Everything has an end – including the market economy. Wolfgang Beck, the last manager of the VEB Elektromotorenwerk Wernigerode (Elmo), talks about the planned economy and the economic collapse and awakening after 1990

Publisher: Rohnstock biographies, Berlin, May 2023

Scope & Price: 268 pages, 19.90 euros

Even if the fulfillment of the plan was his top priority – a works director was not only responsible for production and administration, but also for the company crèche and garden, the outpatient clinic, the holiday homes and children’s holiday camps, for guest houses, the company kitchen, the company newspaper, the combat group unit, the company trade union organization. Celebrations had to be organized throughout the year, from Women’s Day to the Carnival session.

Beck names the steering and control bodies, the power structures, the importance of personal relationships, the solidary favors of the company directors among themselves. Time and time again, people helped each other over shortcomings, bottlenecks and emergencies.

Assembly at VEM Motors in Wernigerode, formerly VEB Elektromotorenwerk Wernigerode (Elmo)

Assembly at VEM Motors in Wernigerode, formerly VEB Elektromotorenwerk Wernigerode (Elmo)imago

He weighs the advantages and disadvantages of a centralized leadership – a debate that is of increasing relevance in times of intensified competition with centrally organized great powers like China. He sees the inflexible dictatorial processes as a disadvantage; he counts social security and “excellent education for everyone” as advantages. Because of such advantages, “a large majority did not perceive the dictatorship as such,” writes Beck. There were 160,000 critics of the system, “that corresponded to one percent of the GDR population”. In the Wernigerode plant, every fourth employee was a comrade, i.e. a member of the SED.

Beck contrasts the idealism of many GDR economic functionaries with their measly, egalitarian salaries with the occasional unconventional interpretation of public property by functionaries. A special example of this not at all rare species must have been the SED party secretary of his company, with his main interest in procuring schnapps and sausages from “giveaways”.

When Beck was appointed the youngest GDR works director in 1984 at the age of 34, the responsible comrades recognized his abilities and his ability to shape a new era of industrial production: if the GDR wanted to survive on the world market with its machines, it was possible without electronics no further – CAD components had to be found. CAD stands for Computer Aided Design. Under Beck, the plant entered the production of next-generation engines.

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Wolfgang Beck as factory director/private


Career: High school diploma, apprenticeship as an electrician, military, studies in Dresden with a degree in electronics technology, doctorate, also in the field of electronics.

Career: At the age of 34 he was employed as works director of the VEB Elektromotorenwerke Wernigerode – he was the youngest works director in the GDR. He remained in this post until the end of the GDR.

In 1989, as everywhere in the GDR, discussions about perestroika and glasnost swelled, especially among leaders and SED comrades. Wolfgang Beck put the chapter for 1989 under the heading “Power of Emotions”: During the factory tour, the desire for change grew, but at the same time also for a secure future. The plan was to be fulfilled; the old head of state proved incapable of acting. Events unfolded. When the Wall fell, the said party secretary was among the first to make their way across the nearby state border to collect the welcome money, the class enemy’s DM.

From then on, entrepreneurship replaced the pressure to plan, and diversity replaced the monopoly of opinion. The idea of ​​saving public property by issuing share certificates in companies was up for debate. Beck remembers how the head of the trustee, Detlef Rohwedder, pleaded for the GDR economy to be strengthened instead of selling it out, and in a personal conversation asked him to continue on the path he had taken. One must prevent “Eastern Germany from becoming the country of the subsidiaries”.

Technology theft in mind

Now there are also signs that a Western electric motor company “saw the chance under the guise of altruism to acquire equity that was lacking in its company through takeover and revaluation,” writes Beck. With Rohwedder’s assassination, such tendencies got their chance after 1991.

Under the new trustee Birgit Breuel (no degree, “representative of big business”) “businesses were systematically liquidated and sold”. The recently formed Elektromaschinenbau AG also got new bosses. Beck writes: “During his first visit to the Elmo, the new chairman of the supervisory board, Reinhard Engel of Buderus AG, made it clear that a close relative of his was interested in certain technologies at the plant, a polite way of describing the technology theft he had in mind.”

The company was now fighting for its independence. Beck’s experience: “To destabilize the Elmo, every means up to and including defamation was welcome.” The chances of survival dropped. Beck calculates the sales value using the usual method: sales times a factor of three to four. Since Elmo sales were 300 to 400 million Deutschmarks (just for business in the West, socialist countries and Germany not included), “this would have resulted in a sales price of one to one and a half billion DM”.

Million dowry for the trust deal

Elmo then went to the Merkle group for probably around 50 to 70 million DM. Beck concludes this price from figures that have become known, such as a “loss carried forward” of 800 million DM – the “dowry” of the deal, as Beck says. Instead of 50 million sales price, at least ten to 20 times as much would have been justified.

Not every GDR company had such a substance, the degrees of wear and tear and depreciation varied. But in general, according to Beck: “Values ​​were simply given away.” He calls the procedure in the Elmo case “a betrayal of public property in the GDR” – prototypical for the new trustee direction.

The new managers then surpassed the old party secretary: “One always started his day at the Elmo with a glass of champagne, another had already led a large motor company in the West into bankruptcy, the next had the cigars brought to the office by taxi…”, writes Beck. He was soon advised not to further “interfere with the restructuring process”.

As an Ossi exotic with the western nobility

When he was still invited to posh West parties as an Ossi exotic, Beck experienced other surprises: On the property of a noble business leader, he discovered a training device for horses – powered by an electric motor from Wernigerode.

In his conclusion, Beck brings together East and more than 30 years of West experience to propose what a society could look like that, unlike the market economy, does not destroy its own livelihood. He envisions a “scientifically sound management of society, controlled by a body such as a parliament or council”. With the help of digitization, emotions should be “increasingly eliminated”: “The bickering of parties would be superfluous. Reason, logic and education would win and a needs economy would emerge. The time is ripe for this.” Everything has an end, including the market economy.

But what to do with the supposedly disturbing emotions? What to do with the emotional people? Some of Beck’s ten theses sound plausible, others are crass or at least utopian. But you can debate that.

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