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Other G.D.R. industries have their Trabants in the form of outdated TVs, shoddy appliances and suits like Khrushchev wore. These unattractive wares now compete with Western goods; before July 1, across the East, prices were being slashed to fire-sale levels to unload old inventory before the full wave of Western goods arrived. If pent-up demand goes mainly to line the pockets of Western suppliers, G.D.R. producers, without financial reserves or adequate credit, will lack the cash flow needed to meet deutsche mark payrolls. Says Claudia Wormann, an analyst with the Inner-German Economic Policy Committee of the Federation of German Industry: "During the first months, enterprises will be living from hand to mouth."
Unemployment is inevitable, and estimates range from a few hundred thousand people to as many as 3 million -- a third of the work force. Klaus Reichenbach, a senior East German official, reckons that 15% to 20% of all companies are doomed, and the remainder will certainly have major layoffs. So far, the impact has been modest. Industrial output has fallen 4.5%, and only 100,000 people have registered as unemployed.
Things would be different if East German enterprises could get help from the deep pockets of a Western partner; thus a fierce mating dance is going on. Each day brings news of deals or rumors of deals, and sometimes it seems as if the G.D.R. is about to become a wholly owned subsidiary of Western business. For the moment, however, many takeover bids are hanging in midair because Western firms can still hold only a 49% share in an Eastern firm. Similar uncertainty surrounds the purchase of property. As Volkswagen chairman Carl Hahn puts it, "people are flying blind."
By contrast, no limits are put on joint ventures not involving a transfer of ownership, and nearly a thousand have been announced. The biggest are in the auto industry: VW and the builder of the Trabant; General Motors and the manufacturer of the Wartburg; and Daimler-Benz and the G.D.R.'s sole truckmaker. These deals can provide a quick supply of salable products and produce needed cash flow.
Automobiles could be the engine of East German economic recovery. Certainly the demand is there. In a country where people waited a dozen years to buy a car, it is a triumph of tenacity that half the households own one. Since virtually all those car owners want to replace their Trabants and Wartburgs with real cars, estimates of potential sales range from 200,000 a year up to 700,000.
GM plans a new assembly plant outside Eisenach to produce 150,000 cars a year by 1993. Executives of Opel, the firm's German subsidiary, do not cite a figure, but the investment will be more than $100 million. Opel managers see Eisenach as a part of their European network, so production is not earmarked solely for the G.D.R.
By and large, Western companies are not counting on East Germany's remaining a low-wage country forever, and they are planning to put in their best technology. Thus, over time, East Germany could become something of a technological showcase. Says Opel management board member Horst Borghs: "It's the nature of the business. Your newest plant is always your best." Opel's newest will be in Eisenach.