The Shape Of Things To Come In Poznan

Ever since communism's collapse, it was a given: Germany would once again extend its influence eastward--this time, economically. German capital and knowhow would march into the former Soviet bloc as thousands of foot soldiers once did, winning markets and low-cost production centers.

I wanted to see it firsthand. Poles in Warsaw told me that German capital was pouring into Poznan, 110 miles inside Poland, halfway between Warsaw and Berlin. Once Germanic by culture (many Poles there still speak German), Poznan would seem the ideal place for Germany's economic advance to begin.

ghosts. I set off eagerly, believing Poznan would give me a glimpse of the future of eastern Europe. It did. But it wasn't the one I had imagined. My preconceptions were based on history and modern myth. The assumptions about the overwhelming force of German capital were actually ghosts of Poznan past, left over from more than a century of German control.

It turns out that Germans dominate neither the capital invested nor the number of deals in Poznan. Just 27% of capital and 30% of new ventures involve Germans. In fact, Poznan's new face is the face of Europe in the 1990s: Multinationals from France, Germany, and the U.S. compete side by side, with no one country dominating. Nationalism is out; joining Europe is in. Poznan's 600,000 inhabitants seem busy embracing a borderless Europe.

As Poznan's business leaders look to global markets, ordinary citizens are welcoming the town's new partners. "We're open to all capital. I'd like [our businesses] to trade with anyone," says Wojciech Mielcarski, a 56-year-old bartender in Poznan's picturesque town square, dating from the 13th century. After all, the city has been a major trading center for 1,000 years, including the communist era, when its annual trade fair showcased Western goods.

Now, foreign investors, from French phone giant Alcatel to Volkswagen, Coca-Cola, and Swedish retailer IKEA, are circling. Alcatel, France Telecom, and computer maker Groupe Bull are planning a telecommunications institute. Austrian, British, Danish, Dutch, Spanish, and Swiss companies are in the vanguard, too.

Foreign influence is easy to spot. In a shop window in the old town square, spring clothes from Germany's Escada vie with those of France's Guerlain. Inside are the latest Italian designs. More boutiques line nearby St. Martin's Street. There's also a big dose of Yankee culture: The most common foreign language on signs is English. Hamburgers, hot dogs, and other fast foods are available. "What do you think we eat, Bavarian pig's knuckles?" says a taxi driver, plunking down his zlotys for a burger.

CARPETBAGGERS. In fact, some natives of Poznan complain that there isn't enough German influence--or at least, not enough German marks. "Unfortunately, Poznan is not overrun with Germans," sighs Zbislaw Kaminski, a Polish engineer who for three years tried unsuccessfully to entice Germans into joint ventures to sell computers. "The myths about German capital are based on old historic investments," says Kaminski.

German entrepreneurs in Mercedes and BMWs prowl Poznan, but few stop to invest. And, the locals complain, many of those who did turned out to be shady carpetbaggers, who set up bogus joint ventures, collected cash upfront, and then disappeared. Before heading to Poznan, I checked the list of German-Polish joint ventures, compiled by the German embassy. Only one had a live secretary, who answered our Polish translator's call and agreed to a visit.

Even this German investment turned out to be a mixed bag. On arrival at the 70-year-old paper-manufacturing company, Malta, the Polish director, Zygmunt Piecuch, tells us that the management cooperation is with a German subsidiary of an Austrian company.

Malta, however, does illustrate the new Europe, where business, capital, and labor move as if borders didn't exist. In 1991, the Polish government told Malta that it would be privatized by London's Hambros Bank, which had won a bid to sell off all Poland's state-owned paper companies. Hambros sold Malta to Salzburg's Kronospan, a family-owned maker of particleboard. "The owner is an Austrian living in Monte Carlo, with a Luxembourg-based company and a German subsidiary," explains Piecuch.

Malta's workers didn't agonize over the takeover by a German-Austrian company, even though it slashed 60 jobs, or 30% of the payroll. Nor did Piecuch, whose father once worked in a German labor camp. "I'm absolutely indifferent about who's investing. I have nothing against Germans," he says. "Without [Kronospan], we didn't have a chance."

As if on cue, Ferdinand Hartig, a no-nonsense, 35-year-old German manager sent by Kronospan to restructure Malta with Piecuch, pokes his head into Piecuch's office. Hartig, bent on doubling Malta's production by 1994, fires a battery of questions at Piecuch in a m lange of English, German, and Polish. Piecuch, 56, answers with ease in the same hybrid language. "We understand each other perfectly," says Piecuch.

'I'M NOT AFRAID.' Of course, there are culture clashes. "Poles are not systematic," says Piecuch. "[But] they may work faster and better than a German, in a wave of enthusiasm. They get something done in half the time of a German worker and then enjoy a cigarette break." By contrast, he says, "Germans tend to work slowly and systematically." Piecuch, for one, follows the German lead, logging 12-hour working days alongside Hartig.

Back in the old central square, locals in a popular bar echo Piecuch's view of Germany and Poland's place in Europe. "If Europe is united, I'm not afraid," says Jan Szar, a 70-year-old Poznan native who spent five years in a Nazi labor camp. Speaking German, Szar insists it was Poznan's Germanic heritage and entrepreneurship--not foreign capital--that produced economic recovery here faster than in other Polish cities. "If the rest of the country were like Poznan, Poland would be doing just fine," he says.

On the train pulling out of Poznan, I muse about Hanna Suchocka, a Poznan native and the only Polish Prime Minister to hold on to that post while pushing economic reforms. Local lore says Poznan's residents are hard-working, full of common sense, and above all, skilled at compromise. That will help attract capital of every flavor in years to come.

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