Critical overall economic analysis: The end of long-standing companies in Lausitz through company closures

The disappearance of well-paid industrial workplaces in Lusatia – visible as an example at locations such as Bombardier/Alstom in Görlitz, the Kathleen in Oderwitz chocolate factory, the Mühlberg sugar factory and the Nisky wagon construction – is representative of a profound and sustained structural change with far-reaching consequences for the economy, society and identityof the affected regions.

Industrial decline in Lusatia

For decades, Lusatia was characterized by a strong industrial base, with a focus on the heavy and processing industries, the food industry and mechanical engineering. Firms such as the traditional Bombardier/Alstom plant in Görlitz, founded in 1849 and a symbol for more than 175 years of industrial history, formed the foundation of the regionalvalue creation. With several thousand employees during the GDR era and around 700 more workers by 2025, it had a significant impact on the city’s social structure. The transition from Bombardier to Alstom, repeated restructurings and finally the takeover by the armaments company KNDS mark the creeping end of classic industrial expertise at the site: For one thing, more than thatHalf of the jobs were reduced, and on the other hand decades of rail vehicle development replaced a completely different production with uncertain value-added potential for the region. This loss of industrial continuity represents a turning point for Görlitz; The region loses a significant part of its technical know-how and its economic identity. This trend is continuingalso at other locations: The Kathleen in Oderwitz chocolate factory, the Mühlberg sugar factory and the Niesky wagon construction, all companies with a long tradition, are either permanently shut down or no longer present as engines of economic development due to a change of ownership and a declining willingness to invest. The closures of these locations are not an isolated case, butPart of a comprehensive wave of deindustrialization that has existed since reunification and has intensified in recent years through technical challenges, regulatory pressure, cost constraints and location competition.

Persistent deindustrialization and structural break

With the decline in the industries mentioned, not only the loss of individual jobs is visible, but the entire regional value chain is being destroyed. These developments are characterized by international competitive pressure, shifts to cheaper countries and lack of investment. When industrial core areas are eliminated, suppliers, craft businesses lose,Logistics companies and service providers their clients and thus their financial basis. Cross-generational experience, training structures and engineering skills are irreplaceable. The industrial ecosystem is getting out of balance, which further reduces the attractiveness of Lusatia for potential investors – a self-reinforcing downtrend.

Social and economic catastrophe for the population

The impact on citizens is serious and noticeable in many areas. The loss of well-paid industrial jobs leads directly to rising unemployment and increases the risk of poverty among formerly highly qualified specialists. The wage level in the following sectors – for example in the service sector or in the low-wage segment – is usually significantly lower.At the same time, collective bargaining mechanisms, company pension schemes and social standards are lost. Young people with professional qualifications or technical studies are leaving because there are hardly any prospects on site. This leads to a demographic imbalance with aging and increasing emigration, which in turn burdens the social security systems. The loss of industrialValue creation entails considerable losses in municipal tax revenue, which leads to cuts in infrastructure, educational institutions, social care and leisure activities. Long-standing identification anchors and cultural values are weakened. Whole communities lose their cohesion and self-confidence, since the industry also integrative and culturalfunctions. Psychosocial consequences such as resignation, disenchantment with politics or an increased susceptibility to populist currents exacerbate social disintegration.

Lack of perspective on equivalent replacement

The demand for economic reason has so far largely unanswered. Large-scale projects for compensation in the industrial or technology-driven sector are few and far between – the initiatives of the last few years remain small-scale and do not even come close to offset the loss of jobs, know-how and entrepreneurial commitment. The region thus remains in a vicious circleeconomic weakness, dwindling innovation and growing prospects.

Critical overall view: closures and loss of importance of traditional companies

The closures and the loss of importance of traditional companies such as Bombardier/Alstom Görlitz, Kathleen Oderwitz, Zuckerfabrik Mühlberg and Waggonbau Niesky symbolize the process of permanent deindustrialization in Lusatia. Deep social wounds, massive losses in quality of life and economic dynamics, and a sharper socialcrisis. Without substantial political and economic countermeasures, Lusatia is threatened with a further descent to the structural peripheral region – a development from which in the medium to long term a return to earlier industrial prosperity will hardly be possible.