West Germany: Shifting South

The heavy industry of the Ruhr built the machines for two world wars and, in more recent years, fueled the post war recovery of West Germany. The Ruhr’s steel furnaces and coal pits, eternally enveloped in a grimy grey haze, are still regarded as the foundation of the country’s economy. Yet, almost un noticed, the concentration of new German industry has shifted south from the Ruhr to a bucolic land of rolling hills and medieval towns: the state of Baden-Württemberg, between the Rhine and Lake Constance.

Sharp Contrast. Baden-Württemberg was formerly famed mostly for the cuck oo clock, which remained for centuries the area’s best-known product. Today, virtually every small village and town has some sort of modern industry, and the state’s output adds up to an impressive 17% of West Germany’s total. Manufacturing accounts for 54% of Baden-Württemberg’s $18 billion gross product, a higher percentage than in any of the other nine German states. Some 10,600 industrial firms produce more and export more per capita than those in any other area of the country. And, according to statistics recently released by Deutsches Industrieinstitut, the state capital, Stuttgart (pop. 614,000), has edged out the Ruhr’s Duisburg as the German city with the highest proportion of industrial workers: 24 out of every 100 v. Duisburg’s 23.

The Ruhr seems unable to break out of its outmoded coal-and steel-based industrial pattern, which is slowly pulling it down. As cheaper oil and natural gas continue to win the battle against coal, an eerie stillness hangs over abandoned mines in parts of the Ruhr. By contrast, Baden-Württemberg is blossoming because it has attracted such modern growth industries as chemicals, electronics and precision mechanics. To lure new industries, the state offers long-range development possibilities, a sunny climate, air that is in sharp contrast with that of the smoky, rainy Ruhr, and excellent transport facilities to France and Switzerland, which take 22% of Baden-Württemberg’s export products.

Tipping the Balance. Since 1963, chemical firms in the state have increased their sales by 50%, to last year’s $900 million, and electronics industries by 26%, to $2 billion. Machinery manufacturing has achieved an annual growth rate of 6%, reaching $2.4 billion in sales in 1967. Many large U.S. companies have firm roots in the Stuttgart area. IBM-Germany is now Baden-Württemberg’s third-largest enterprise, after Daimler-Benz and Bosch. International Telephone & Telegraph Corp. owns Standard Elektrik Lorenz electronics company, the state’s fifth-largest firm. Litton Industries, Ampex, Perkin-Elmer, Hewlett-Packard, Bendix Corp. and Hughes International are represented through their German subsidiaries.

Two years ago, IBM-Germany was searching for a place to set up its new headquarters. Says Assistant General Manager Manfred Wahl: “We looked at Dusseldorf in the Ruhr and at Frankfurt, but we chose Stuttgart. Our managers prefer to stay here.” That kind of intangible is often enough to tip the balance in Baden-Württemberg’s favor. It makes a difference to be able to look out an office window and see green hills topped by castles instead of clouds of soot.