Jena Tech Company Is A Turnaround Success Story

Dr. Lothar Spath, CEO, Jeneptik AG

Any economic history of Eastern Germany since the Cold War would not be complete without citing the example of a company called Jenoptik AG.

Jenoptik AG grew out of Jenoptik Carl Zeiss Jena GmbH, the world famous optical company. At the end of World War II, many of the company’s best scientists moved to the West.

Two Carl Zeiss companies began to operate: one in West Germany and one in its original town of Jena, a small town with about 100,000 inhabitants in the state of Thuringia.

During the Cold War, the Jena company became a communist industrial powerhouse employing 67,000 people and making everything from cameras to satellites for sale to the Soviet Union and other communist countries.

Following German reunification in 1990, the Carl Zeiss company of West Germany took over Carl Zeiss operations in Jena for the contract price of one Deutsche mark. The 49% of the old East German company that was left over became Jenoptik, which by then consisting of acres of run down real estate, 27,000 worried workers and no market for its products.

Jenoptik AG makes thermographic cameras.

But along came Dr. Lothar Späth, a former prime minister of the West German state of Baden-Wurttemberg, who had first visited Jena as a consultant. With a $2 billion loan from the German government, Dr. Spath took over the company in June 1991. He immediately realized that the products that were being produced at the company no longer had a market, in the former Soviet Union or anywhere else.

He knew he had to develop new products and new markets building on what he knew was a world-class pool of talent in Jena.

At first, however, Dr. Späth must not have been the most popular man in town. Within six months of acquiring the company, he was forced to lay off 60% of the 27,000 workers at the old company. Many of the company’s buildings were torn down to make way for new industrial parks that he sold off as best he could to raise cash. Much of the public loan money that he had parlayed from the German government simply went to pay for environmental cleanup, pensions and unemployment benefits.

“Clean Room” for high tech.

In Eastern Germany’s largely unregulated business environment, Dr. Späth saw a business opportunity. He set about transforming the defunct company into a global technology leader.

After scores of false starts trying out businesses ranging from security systems to telecommunications the company finally found its footing.

Today, Jenoptik is a dynamic publicly traded economic engine with more than 6,600 employees operating in 20 countries. Sales for the first half of 2001 were € 833 million. Jenoptik AG has three core divisions:

• Clean Systems – Provides clean room facilities and services for manufacturers of electronic, pharmaceutical, chemical and other products

• Photonics Technologies – Supplies precision optical components such as high-power diode lasers, high-resolution lenses and CCD cameras for professional digital photography

• Asset Management – Supports high tech companies with venture capital through its financial subsidiary, DEWB. For further information, see www.jenoptik.com.—