Magazine article Management Today

Berlin-Chemie: Threatened by Politics

Magazine article Management Today

Berlin-Chemie: Threatened by Politics

Article excerpt

Berlin-Chemie: threatened by politics Berlin-Chemie is one of the hundreds of companies whose fate is in the balance. But in addition to the problems facing most of east German industry, this pharmaceuticals giant has an enormous political hurdle to overcome.

Written into the unification treaty is a clause sponsored by (former west) German Labour Minister Norbert Blum saying that because salaries in the east are less than half those in the west, pharmaceuticals should be sold at 45% of their western prices.

'If it is enforced, it would be a death sentence,' declares spokesman Joachim Eckert bluntly.

Since last July's currency and economic union, exfactory prices have been reduced by a staggering 40% at Berlin-Chemie in order to preserve competitiveness. However, because wholesale margins took a hike and at the same time 14% VAT was slapped on to all drugs, retail prices have actually risen by 25%.

Personnel director Gunter Urban tells the usual tales of workforce cuts in order to improve productivity. 'In spring this year we had 2,700 employees,' says Urban, 'by the end of '91 we will have to reduce this 1,500. …

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