Magazine article Management Today

Stern Radio: A Company Doomed to Closure

Magazine article Management Today

Stern Radio: A Company Doomed to Closure

Article excerpt

Stern Radio: a company doomed to closure 'They're pushing through their market economy and no one cares that we're bleeding to death,' says Lutz Bojahr at Stern Radio. A warm yet melancholy man, Bojahr has worked at Stern for longer than he cares to remember. And as head of the Betriebsrat, the employee council, he feels acutely responsible for the 2,000 workers still left at this one-time showpiece factory.

Stern Radio has no chance of survival. It makes products -- cassette recorders -- that nobody wants to buy; has a brand name that no one has heard

of; and costs that are many times higher than its competitors'. On top of all that it has debts reputedly running into tens of millions of Deutschmarks.

Headquarters are in Marzahn, a soulless suburb to the south of Berlin. The factory is just six years old and in typical fashion has everything from plastic spraying facilities to final assembly. It used to turn out half a million units a year, mainly to serve the home market but also for export to Comecon and capitalist countries.

But with the events of autumn '89 Stern's fate was sealed. East Germans rushed west and the first thing they bought with their DM100 'welcome money' was a Sony Walkman or a Philips radio. Customers disappeared overnight, contracts vanished and export subsidies were snatched away.

In the intervening months the workforce has shrunk from 3,200 to 2,100. Of these, 800 are on zero hours short-time work. Companies have come and gone ('We've had over 100,' says Bojahr) but no one is interested in buying or supporting Stern.

The only option, it seems, is to sell off the site in small units to whoever is willing to buy. 'But if the Treuhand can't find a better alternative, we need a parallel solution for the people,' says Bojahr. 'It cannot be that Stern is sold off without anyone knowing what will happen to the people.'

There is clearly a lot of emotion involved. Many of the employees have been with Stern for all of their working lives. They don't want to see their hi-fi factory turned into a supermarket or an office block. As for Bojahr, he is critical of the Treuhand's lack of interest in marketing companies like Stern internationally. The Treuhand is our owner, it is responsible for finding a buyer. Just because it has a lot of companies, it can't shirk its responsibility. I have 2,000 workers to look after; I can't tell them, "don't come to me, it's not my problem". …

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