Look Who's Out Scrounging For CashBy
Six miles over West Texas, Germany's Economics Minister, shoeless and his necktie comfortably loose, leaned back on the gray wool sofa on his Luftwaffe 707 and made a confession. "This is a new experience," he mused. "A German economics minister never had to do this."
Not since the postwar economic miracle has Bonn been forced to seek investment from abroad. But after pumping $100 billion into the former East Germany in the year since reunification, even the wealthy Germans are looking for help to get the job done. So the 46-year-old Jurgen W. Mollemann, a straight-talking politician who dreams of rising to Foreign Affairs Minister someday, has embarked on his first hunt ever for cash overseas.
MOBBED. Along with three dozen colleagues from Bonn and Berlin, Mollemann started off on a recent Saturday marching in New York's annual Steuben Day parade, then jetted to California to dine with business executives poolside in Beverly Hills. By Monday, he was breakfasting in Houston with oilmen and bankers.
Chicago and Detroit were next. Now, at a mobbed dinner party at New York's posh Pierre hotel, Mollemann, chatting in impeccable English, smoothly works the crowd of bankers and CEOs. As the executives finish their filet mignon with truffles, Mollemann launches his spiel. Noting that his government's Treuhandanstalt holding company still has more than 6,000 former East German state companies on the block, he says: "Ladies and gentlemen, let's talk business."
Whether many Americans are willing to do so is another question. Running down his sale sheet, Treuhand Director Klaus-Peter Wild reels off names of toolmakers, electronics plants, and even shipbuilders. Bringing these and other companies up to Western standards, he says, will require some $40 billion in private investment over the next three years. Indeed, to make a sale, "we can customize a company according to your needs," says another Mollemann aide. But in the past year, only 10 U. S. investors--among them General Motors Corp. and Procter & Gamble Co.--have bought in. Another, California integrated-circuit maker LSI Logic Corp., is now negotiating a purchase. Nearly everything else has been taken by Germans.
Problem is, there may not be enough Germans to sop up the rest of the Treuhand's list, especially if the economic slowdown in the country's western half limits corporate spending. So Mollemann is pledging to roll out the red carpet for any investor, German or foreign, offering them generous tax credits
and government support for laid-off workers, among other things. U. S. executives from coast to coast, however, have told the minister that Mexico, Poland, and other emerging economies--where wages are cheaper--probably are better bets.
GLOBAL EFFORT. Even worse, many complain that Germany's clannish business interests have already picked the east clean. "When the wall came down," snaps Samuel Goldberg, president of metals-producer INCO United States Inc., "some of us were overrun by Germans who had a toehold already. The best opportunities have been seized--and the rest we don't want."
Mollemann brushes off such talk, saying, "If you feel you're at a disadvantage, call me." But expect another sales pitch when he answers. "This task is tremendous," says the minister. "All the scientists published books on how to transform capitalism to socialism--not the other way around. We're learning by doing." Soon, he'll take this message to Japan. How well he does on his global fund-raising effort may shape his political future, as well as the dimensions of eastern Germany's reconstruction.