Imagine a small metalworking business that started shortly after WW1 somewhere in Germany. Metalworking, as in making forms for the ceramics industry that the little town is known for. The business grew in the time between wars, it survived WW2 and continued to grow well into the second half of the 20th century. At that time a new market for metal forms began to emerge – injection moulded plastics. The family owning the business latched onto that new market in an ideal way that capitalism is portrayed, by investing in developing new know-how to give them an edge over the competition. And they succeeded, making a name for their company in the business that became a synonym for high quality, albeit at a high price. As a regional employer, the family business had a good reputation too, with some people literally working there from finishing school until retirement and earning wages well above average. It was said that at the end of each fiscal year, the door opened for new modern machinery and a new workforce.
Then came an international giant housed in the USA, interested in the know-how. And since the family no longer had an interest in actually running the business, they sold it to this giant wholesale. The plant became a part of a branch in this corporation, a branch that specialized in injection moulding. Things did not go well from that time on, although it still took decades to become really apparent. For one the prices for customers remained high, but the quality began to drop due to cut corners.
The international corporation had no real interest in keeping the know-how and employment local, despite saying the opposite. The wages were undercut by increasing working hours so in real terms they de-facto stagnated. It was still worth it to work at the company, but it no longer was a job to envy someone and some people started to leave – and as it is, the best ones were the first to go. Attempts to unionize to counter the slow squeeze were crushed by threats to ship the jobs to Eastern Europe and China, something that should not work in Germany but it did. And then the jobs were slowly shipped to Eastern Europe and China anyway. The know-how however is not so easily transferred, and since replacement workforce was no longer educated on-site and the older force started to retire or just leave, it started to get lost.
Then came a worldwide recession. The corporation started to cut corners again by firing thousands of employees worldwide, all the while the CEO and shareholders were despite the crisis earning more than enough money to keep these people employed and still be filthy rich (the CEO alone earned more than 150 (corrected typo) times more than an ordinary employee). The employees finally got fed up and unionized, for what it was worth. As it turns out, it was too late.
After the recession was over, the whole corporation was bought by another international corporation, this time housed in Germany. Things started to look brighter for a very short time since German corporations actually treat their employees better than American ones. But optimism did not last long. The purchase was driven by a desire to own one specific part of the corporation, and injection moulding and manufacture of metal molds were not it. So to offset the immense costs of the purchase, the whole branch was sold off, to another international company housed in the USA.
The new corporate owners swore day and night that they really, really wanted to keep the local businesses and nobody needed to fear for their jobs. There were even articles in local newspapers about how they project to grow the locally employed workforce at the plant I am writing about to more than double, over 400. Yet somehow the number of employees and contracts for this specific plant continued to only go down all the way to 60. At 60 the count stopped and the plant was finally closed, probably because with that few employees it was no longer feasible to actually make money in this business, not to mention that the know-how it took to assemble for half a century was at this point irrevocably lost.
Imagine all that. I do not need to imagine it, I lived through a significant part of the end of that story and I just a few days ago learned how it ended.