David Montgomery: They never saw him coming

As the German press gears up for its biggest event for years, all is not well at the 'Berliner Zeitung'. The reason - the paper's new owner David Montgomery. Ruth Elkins in Berlin and Ian Burrell report on a clash to rival anything on the pitch

The grey drizzle falling on Berlin's Alexanderplatz could not be more apt. The journalists who work here, at Berliner Zeitung, should be in a sunnier mood; the World Cup starts this week, and the spotlight is firmly fixed on Germany. There are plenty of stories to be had about neo-Nazi riots and football hooligans.

Instead, the 150 staff are miserable - mostly because their newspaper is owned by David Montgomery. "You know," sighs Regine Sylvester, "the moment I saw him I just thought: what a thin, nasty little man."

In her office on the 11th floor of the Communist-era Berliner Verlag tower, Sylvester, a 60-year-old executive editor, is swinging on her swivel chair like an angry schoolgirl. "You know," she says again, "what's happening here is a complete catas- trophe. An absolute disaster."

At the end of 2005, the former Mirror Group chief executive paid £100m to become the first foreign owner of a German publishing group. But it was only last Monday when Montgomery's revolution at Berliner Zeitung began in earnest. That was the day on which editorial staff at the paper were due to conclude negotiations with management on a new statute giving them powers to veto the appointment of editors-in-chief.

Having feared a profit-driven dumbing-down from the moment Montgomery - the "Anglo-Saxon locust" as staff have dubbed him - walked into their building last October, the move, they said, was to protect the quality of their broadsheet from their new financial investor owners.

Berliner Zeitung's editor, Uwe Vorkötter, was on his way to Italy on holiday when he got the call telling him he no longer had a job. In Berlin, Sylvester says, "it came as a complete surprise. At 9.55am a man we'd never met turns up in the building. At 9.56am we get an e-mail telling us to assemble to meet our new boss."

In Britain, the change of editorship might not have been quite so shocking to staff, given that Vorkötter had previously written an editorial pleading with the owners not to sell to Montgomery. The paper's management quickly took the view that his heart was no longer in the paper and he was unable to give staff the direction they needed.

But the new editor, Josef Depenbrock (below right), was seen by many Berliner Zeitung journalists as everything they feared. The 44-year-old was the former editor-in-chief of Hamburg's Morgenpost tabloid (also owned by Montgomery). His main publishing experience, in the eyes of one Berlin observer, was "editing dodgy investment magazines and bi-monthly TV guides".

For the first time, staff heard their editor telling them profits had to rise by 20 per cent. The installation of an editor whom staff immediately sensed was "Montgomery's man" was "an absolute affront", says the executive editor Ewald B Schulte; so much of an affront to the former Communist paper whose stated aim is to be the "Washington Post of Berlin" that the journalists immediately went on strike.

"Actually, we didn't technically strike," grins Thorsten Knuf, a business reporter. "German law is pretty specific on when you can do that. We just had long meetings to discuss the leadership change." By 5pm, the newly-installed editor noticed a lack of copy in the system. Tuesday's early edition wasn't printed; the later edition (pictured below) had 12 pages instead of the usual 40.

In a move that would be unthinkable in Britain, the new editor Depenbrock gave up a column on the front page to the staff, who wrote an explanation of their grievances. The editor gave his interpretation on page two. He has promised that the paper will retain its quality reporting. "I prefer a gladiatorial editorial staff than a phlegmatic one," he has claimed. Friends of Depenbrock take the view that he is a skilful editor from a Hamburg newspaper that has a fine pedigree in developing journalists.

Nevertheless, the fury among Berliner Zeitung journalists at the change of editor was not unexpected. German newspapers are still rather old-fashioned, intellectual, sometimes staid, often family-owned. There has already been trouble at Berliner Verlag, the publisher of Berliner Zeitung, Berlin's Time Out-style listings magazine TIP and the Berliner Kurier tabloid since Montgomery announced his intention to buy them. Staff poured on to the streets in protest with signs saying "You are not welcome Mr Montgomery". Berliner Kurier and TIP started a "no locust" campaign, drawing on a German politician's likening of investment fund managers to swarms of the insects that descend on companies, pick them clean and move on. Vorkötter penned his damning article against entrusting the paper's future to Montgomery.

"The idea that an editor should be a kind of financial, profit-driven leader is completely new to German journalists," says Stefen Grimberg, media editor at the left-leaning Taz broadsheet. "They are used to having an editor on their side, entirely focused on content, who relies on management to balance the books."

No surprise, then, that Montgomery's welcome was chilly. "Can you even read the Berliner Zeitung?" the paper's political editor, Bettina Vestring, asked the new owner in an interview. When Montgomery told staff (via a translator) that he planned to turn Berliner Zeitung into a "serious newspaper of high quality" they snorted, asking: "What are we now?"

Montgomery sympathisers might argue that his company Mecom relies on local management, specifically the newspaper group's chief executive Peter Skulinna, to be responsible for taking day-to-day decisions.

The hostility towards Montgomery was understandable given the way his record in British newspapers is generally perceived by journalists. Richard Stott, the former Mirror editor, has long been one of his fiercest critics. This year, Stott wrote an article for Message, a German journalism review, in which he accused Montgomery of having "ethnically cleansed" the Mirror's staff, saying: "It is easy to form the impression he doesn't much take to the human race and the human race hasn't much taken to him." The piece ended: "You have been warned."

Andrew Marr was editor of The Independent when Mirror Group, then headed by Montgomery, was a major shareholder in this paper. In My Trade, Marr described Montgomery's determination to change this paper's personality. "The friendly discussions turned into arguments. The arguments became rows. It became quickly obvious that if he won complete control, the paper as I knew it was finished."

Of events in Berlin, Marr says: "Anyone who was working at The Independent in the mid to late Nineties will find all this wearisomely familiar. David's obsession at that time was removing as much traditional reporting as possible from the paper and turning it into a tabloid-style scandal sheet for yuppies."

Montgomery would say that, rather than butchering papers to cut costs, he has put them on a firmer footing and, in the cases of the Mirror and The Independent, prevented them from going to the wall. Not every journalist regards him as the enemy. The Sun columnist Jane Moore, who worked with Montgomery when he edited Today newspaper, nominated him in these pages as her mentor. "He was a bastard, but he was a fair bastard," she said.

His German staff don't appear to agree. With football fever raging, some might even blame him for the "Achtung! Surrender" splash in Piers Morgan's Daily Mirror before England's Euro 96 semi-final with Germany, when Montgomery was still the Mirror Group chief executive.

One of his initiatives to reassure Berliner Zeitung staff appears to have seriously misfired. "The idea to send some woman from London to tell us how to make newspapers was entirely arrogant," says Regine Sylvester. The "woman from London", was, in fact, the London Evening Standard columnist Anne McElvoy, sent to Berlin, the paper believes, by Montgomery to tabloidise them. "She critiqued the paper, telling us we didn't need foreign correspondents," Sylvester snorts. "Oh, and that we should make it more local by having pictures and articles of pigeon-breeder fairs and gardening clubs," adds Schulte. "We just turned to the management in disbelief and said, 'That wasn't a serious attempt to give us a new editor, now, was it?"

The irony is that, pre-Montgomery, Berliner Zeitung was, in the eyes of senior staff, doing fine. Founded in 1945, it became a mouthpiece of Communist East Germany. After reunification, it was bought by the Hamburg-based Gruner & Jahr group. When they sold it in 2002 to another German group, Holzbrinck, the intention was to merge the paper with another Berlin broadsheet. But competition rules barred the move and, for two-and-a-half years, the debt-ridden, ownerless Berliner Zeitung managed itself. Cutting costs and jobs, the paper put itself back in the black and was, by German standards, turning a pretty decent profit.

Now the paper has to service €93m (£64m) debt after Montgomery bought it using credit loans. "We were debt free and now it's like we're being made to pay for our own sale," Sylvester says. In the eyes of some managers, the 30-month interregnum left the paper lacking in leadership, creating the culture that allowed the journalists to use the front page for their own ends last week.

Now, there is the spectre of job cuts. "The anxiety is well founded," Grimberg says. "The only way Montgomery can achieve his 20 per cent return on investment in the current climate is by cutting staff. He's not going to do it by increasing circulation or advertising revenues, because the increases would have to be massive."

Josef Depenbrock has hinted that Berliner Zeitung and Hamburger Morgenpost will co-operate in future. "They will look for synergies," Grimberg says. "German newspapers have believed they are immune to globalisation. But they are not."

Oddly, under German labour law, when jobs are cut it is the younger, usually cheaper, staff who are first to go. "We're worried," says Schulte, who is 54, "that we will lose our young talent." That, he says, will mean a slow death for Berliner Zeitung.

Working life has, for the moment, returned to some normality. Journalists are turning in copy, although they say they will continue to fight for their editorial statute and won't accept job cuts. "We are willing to strike for real," says Thorsten Knuf. "We're in fighting mood."

Knowing what Montgomery has been capable of in the past, do they really think they'll win? There's silence, before Regine Sylvester says, with a hint of sadness: "I think we've all developed a sort of gallows humour."