Zeiss rejig ignites protests

Directors of Carl Zeiss, the precision optics and fine mechanics business, yesterday fought off protests from the workforce as they insisted on a radical restructuring and cost- saving programme. Hans-Kurt Fugert, Zeiss's chief financial officer, said the job cuts and re-organisation were essential to prevent further massive losses.

With 3,000 jobs to be axed, the severe problems of Zeiss, a company with a first-class reputation for its optical and engineering products, have exploded into a flaming east-west German political row. While Zeiss's traditional business, based in Baden-Wurttemberg in the west, has been hit by recession, the bulk of the losses stem from its disastrous foray into the east where, after 45 years of separation, the firm took a 51 per cent controlling stake in Carl Zeiss Jena in Thuringia after unification.

The Carl Zeiss group made a loss of DM180m in 1993/94 on sales of DM2.5bn.

However, DM140m of these losses came from Carl Zeiss Jena, on sales of just DM210m. The state government of Baden- Wurttemberg has protested that the bulk of the job cuts are falling on Zeiss firms in its area, while it is the operation in the east that is responsible for the debacle.

The government in Thuringia, for its part, has argued that the western Zeiss received massive public subsidies when it took over the eastern business, and that this aid was coupled with guarantees on maintaining a certain level of jobs.

The restructuring plan foresees the 15,900 group workforce being reduced by 3,000, and cost savings of DM250m over the next two years.