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The development of the machine tool factory “UNION Chemnitz“ from 1852 till today
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Norbert Komorek
Mon Jul 01 2013, 12:12pm

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The development of one of the oldest machine tool factories “UNION Chemnitz“ from the foundation in 1852 till today

The factory UNION Chemnitz in 1886


                                       The UNION machine tool factory Chemnitz in 2002


1.       Introduction

2.            From the foundation in 1852 till 1945  
2.1.        David Gustav Diehl – the founder of the enterprise

2.2.       The foundation of a limited company. Friedrich Ruppert. UNION gains world-
               wide renown as “Special Factory for Horizontal Drilling and Boring Machines“.

2.3.       World War I. World Depression. Russian Orders

2.4.       The 30-ies. Second World War   

3.           Expropriation and rebuilding after the end of the war till 1990

3.1       Dismantling, Expropriation and first Rebuilding

3.2       UNION becomes a Government Owned Factory (VEB). Social care for the staff

3.3       UNION gets leading exporting firm for machine tool construction.             
             Integration  of Hungarian and Vietnamese workforces. Introduction of
            polytechnic teaching. UNION enters into combination with  the machine tool
            plant “Fritz Heckert“.

UNION under managing director Wolfgang Becker. Important results in export.
            Construction of machines with microelectronic control and laser technology     

4.       The factory after the political change to bankruptcy in 1996 

5.       The UNION as a company of employee until 2009

6.       The machine tool factory UNION composite of Herkules Group

7.         Annexes 
8.         Bibliographical References 

1.      Introduction  
 The senior college of the TU Chemnitz actively involved in the international project "More than neighbors" with participants from six European countries. The project aims inter alia exchange of information with senior education institutions in the partner countries to industrial culture of their home region. With the following report presents the project group one of the oldest machine tool factories in Germany - Chemnitz - the UNION machine tool factory.   This company manufactures horizontal boring and milling machines with which workpieces up to 10m height and 40m in length can be with a weight up to 250 t processed. These products are available worldwide for high performance and precision and quality.   The UNION Werkzeugmaschinenfabrik was also chosen because the company in its 160-year history without interruption of all social changes, wars, and political upheaval across to date has been successful.   Special thanks to Dr. Dieter Bock, author of the commemorative publication"150 years Werkzeugmaschinenfabrik UNION Chemnitz 1852-2002," whose content is received in large part in this report.

2.        From the foundation in 1852 till 1945

2.1.         David Gustav Diehl – the founder of the enterprise
The young Diehl receives a good education: six years in elementary school and then four years at a private higher secondary school in Barr. From 1839-1845 he worked in the family business and first learns the trade of blacksmith stuff before he worked for various companies in cities of finally he moved to Chemnitz, and at first he worked in the company of his compatriot Richard Hartmann in his profession and as a master.
Two significant entrepreneurs originating from the small town Barr in Alsace – today belonging to France – arrived  the flourishing town Chemnitz in the middle of the 19th century: Richard Hartmann, later  the so-called “King of Locomotives“ and David Gustav Diehl.
Diehl`s father Jean Diehl worked as a tool smith and ironmonger. His youngest son David had a good upbringing: he attented an elementary school for six years and then a higher private middle school in Barr. He worked in his father`s factory from 1839 till 1845 and at first he learned the trade of a tool smith. Then he worked in several factories in France. Finally he came to Chemnitz and began to work in his trade and as a master. in the factory of his compatriot Richard Hartmann. After having gained much experience he opened a mechanical workshop in 1852.   At first it is in a back house near the city. The quality of the products is high and so the firm grows quickly. Soon in 1854 the workshop has ten employees. Already in 1856 Diehl rents more rooms and also uses the water power of a creek to drive his machines. In the following years Diehl concentrates upon the construction of machine tools, that means boring machines, metal working lathes, planers, millers. The factory is so successful that Diehl can buy another plot and builds a factory hall there. 50 processing machines and an overhead traveling crane stand in this hall. He can build another factory hall very soon. Diehl equips it with the most modern machines of its time and he also employs more workers. In order to be able to transport the manufactured machines more quickly and more efficiently, he sat an application to the Chemnitz town council to get the permission to build a goods station at a nearby station. 
Diehl is not only a successful entrepreneur but also an active member of the social life of Chemnitz: for example he is a member of the citizens` committee and a town councilor. As the metal-workers of Chemnitz are on strike on October 28th, 1871 to enforce a ten-hours-working day, Diehl`s factory is also affected. 

2.2. The foundation of a limited company. Friedrich Ruppert. UNION gains world-wide renown as “Special Factory for Horizontal Drilling and Boring Machines“.   
The factory is changed into a limited company in 1872. Now Gustav Diehl is managing director and Oscar Ufert his representative. Mr. Ufert had already worked as a technician in the enterprise for ten years. He is very active with several honorary posts beside his work in the factory, for example he also works actively in the association of technicians in Chemnitz. The year 1885 means a turning point in the history of that young firm, when the founder and managing director David Gustav Diehl withdraws from the managing board. He is getting the elected Chairman of the Supervisory Board. Diehl will carry out this duty till his death in 1903. We see UNION machine tool factory among the most efficient machine tool factories of Europe between 1872 and 1884. The successful work of the enterprise helps it to get through some years of complicate economic situations. Practically the factory remains in the hands of the family, because Diehl`s son Gustav Emil, born in 1852, takes on the direction of the enterprise. He was capable to take it on after his studies at the Higher Vocational School in Chemnitz and the ten years work as an engineer in  UNION. Mr. Ufert and Emil Diehl develop the first horizontal boring and milling machine between 1875 and 1877.
 This construction will determine the profile of UNION in future.   In the following years basing on good incoming orders the firm can invest powerfully, particularly from 1889 till 1892. This becomes apparent by the equipment of new processing machines. Up to 1890 they did not only produce machine tools, but also textile and wood working machines, several types of pumps and presses. Roughly 200 models of the most various machines show the creativity of their staff. In a lecture Emil Diehl refers on the other hand to the the disadvantages of the wide range of their products: they cause high production costs. The concentration on certain  machines types would reduce costs and promote more accurate execution on the production. Moreover, it would be possible to produce more machines. In his speech Diehl relied on his remarks primarily on the findings of American entrepreneurs. Already in 1899 the factory is enlarged with a factory hall. The new hall stands out for a construction with sunlight and a crane of 3,5 tons load capacity. There is some remarkable progress in the production and technology in the 90s. Now they concentrate on producing of planers, slide rest lathes and a horizontal boring and milling machine. This concentration on specified types of machines considerably increases the production, improves the quality of the products and reduces the production costs. An essential point is the introduction of precision measuring techniques, which allow to produce structured compound groups in series, so that the components must not be produced for each machine. An important personality in the history of UNION was Friedrich Ruppert, born in Chemnitz. He had visited the Higher Citizens` School in Chemnitz, which he graduated with the assessment: “quite a good worker“. Already during his apprenticeship to an engine builder, he begins his studies at the Vocational School completing his education with highest honors in 1861. After his studies he works in several enterprises, temporarily as a chief erecting engineer at the first part of the Trans-sib railway in Samara. Returned from Russia he overtakes the directorate of his father`s wooden ware factory and builds mangles, office and school furniture. He buys wood working machines for his factory preferably  from factories in Chemnitz. He gives up his firm for financial reasons after ten years and begins to work for UNION in 1884, again proceeding machine tool building. Here the construction of gears fills his life. He and his son Siegfried, who is also working for UNION is granted a patent for a reversing gear in 1900 – the inventors`  name is internationally often used when  machines are constructed. This gear is so successful, because it has a simple construction, is easy to handle and has few gear wheels. Mr. Ruppert is, already 65 years old, is appointed as the Technical Manager of the enterprise. UNION gains international reputation under his management and turns into a “Special Factory for Horizontal Boring and Milling Machines.“ Mr. Ruppert also writes a book titled:“ Tasks and Progress of the German Machine Tool Building“. Nearly 73 years old he leaves the company and his son Siegfried assumes the post of the Technical Manager till his death in 1937. After 1900 the outstanding quality of the UNION products is proved by awards in several world exhibitions: a horizontal boring and milling machine awards a Golden Medal in Paris in 1900; a horizontal drilling and boring machine awards another Golden Medal in Liège in 1905 and a honorary diploma in Brussels in 1910.

2.3. World War I. World Depression. Russian Orders 
From 1911 UNION gets busy with the construction of a new generation of horizontal boring machines, which are protected internationally. 
The upward trend of the economy during 1909/1910 allows the management to enlarge the factory, especially with the construction of a big assembly building in 1912.
 In addition, the turnover of 1.615.000 Mark in 1912/13 is the largest in the former history of the factory and shows how successful the enterprise works.

Since 1916 on the skilled merchant Bruno Lorenz is  the General Director of the UNION and leads the enterprise successfully through the hard times of the world depression from 1929 till 1932. After having left the firm in 1935, he supports the supervisory board of the firm by his findings and experience. A wide range of new types of machines is built, because the development and production of horizontal boring machines is consequently in the centre of the attention. The outbreak of World War I forces to employ more women and unskilled workers. So the production can be maintained. In spite of the burdens of war it is possible to realize some constructional measures, for example to enlarge an assembly building and to erect a large storage room. Moreover, the administration building gets reconstructed. By purchasing some houses the firm- areal grows on 19.000 m² , the buildings take 11.000 m². 28 employees of the firm lose their lives in the war. In contradiction to other factories the production can be continued seamlessly after the war. UNION was not integrated into the production of war goods. In November 1918 on the 48-hours-week is introduced – an important result for the staff. Another serious milestone in that time is the partition of the production between the former competitor Kurt Wetzel in the city of Gera and UNION in December 1918. Now UNION builds machines with 80mm spindle diameter and smaller. This enables to produce more effectively and to expand the production in series. In 1921 a firm in Offenbach/Main  joins the treaty between the firm Kurt Wetzel and UNION. So the so-called “Bohrwerk-Konzern“ (horizontal boring machine combine) is created, which produces 90% of all horizontal boring machines. The treaties are prolonged in 1925 and 1929. The hitherto economically healthy enterprise is confronted by many difficulties in times of the world depression. Starting in August 1925 the management issues small coupons with five millions, three millions and five millions Mark. Later it issues great coupons valued 100.000, 500.000, one million, two and three millions Mark as payment of wages. In this way the management provides security for UNION in the time of inflation. The coupons are valid till October 30th, 1923 and can be redeemed at the cashier`s office of the firm. The balance sheet on “Goldmark“ - basis is specified from July 1st, 1924. The enterprise possesses a capital of 1.040.000 Goldmark and a reserve fund of 260.000 Goldmark. Full employment again is possible by the end of 1924. The 75 - anniversary  of the firm is celebrated festively and a first commemorative volume is published. The strong increase of the car production causes a higher requirement of special purpose machines in the first half of the 20s. UNION reacts with the production of multiple spindle boring and milling machines, which are successful in the market. The firm survives the time of the great depression from 1929 till 1932, because they produce such special purpose machines and have orders from the Soviet Union. In March 1932 there are orders from the Soviet Union to the amount of 207.000 Reichsmark. Nevertheless, the staff is forced to work short time from the beginning of 1932.   

2.4. The 30-ies. Second World War 
The “Bohrwerk-Konzern“ is given up in September 1932, because the firm in Offenbach quits the treaty, but UNION continues a close co-operation with the firm Kurt Wetzel in Gera. The workforce increases from 91 persons to 234 in the years 1933/34. The 48 hours-working time per week is equivalent to the collective agreement. A skilled worker gets 100 Reichsmark per month, female workers only 60 Reichsmark per month. March 1936 is a turning point in the history of the firm – the assets  of the enterprise is transferred to the firm Kurt Wetzel in Gera and UNION becomes now a branch establishment. Engineer Erich Ziegenhals manages the Chemnitz branch establishment as an officer authorized to act and sign on behalf of the firm and “Betriebsführer“, the name of a managing director in the 30s. Especially since 1936 UNION is brought up to date and enlarged. Starting 1937 on, the staff does more and more overtime and since 1939 the employees partly work in night shifts. The techno-logical working processes are further improved. New built streets within the factory allow  the quicker transport of manufactured items by electric tracks. More machines can be built, because the production is limited on six models with three spindle diameters. These few models can be produced in a large number of pieces. This limitation has also positive  consequences for the administration, the dispatch and the accountancy. Only machines in two spindle diameters are produced till the end of the war in 1945. UNION possesses more than approximately 300 machine tools and processing machines. The heavy allied air-raid in March 5th, 1945 is disastrous for the factory.The joinery with garages, wardrobe, washing-rooms are completely destroyed. The production rooms  are partly in ruins, so that they only can produce very restricted.   

3.             Expropriation and rebuilding after the end of the war till 1990   

3.1.         Dismantling, Expropriation and first Rebuilding   
Like for nearly all factories in the town the year 1945 was one of the most dramatic breaks in the history of the enterprise. Due to the extensive destruction of the town and of the factory it is not possible to continue the production. At first, it is necessary to eliminate the debris and to repair the most necessary needs. Chemnitz is occupied by the Soviet army and is subjected to the commands of the Soviet Military Administration. Factories, which had produced goods of military importance in the last years of the war, have been dismantled totally or partly. For the last 6 month of the war UNION had provided approximately 25% of the payroll service for military deliveries. Therefore UNION  is also partly dismantled. This happens in two periods: from June 15th to October 16th, 1945 and in May and June 1946. Already at the end of October 1945, 95% of those machines - which were still there in May 1945 - are dismounted, and the total heating installation, too. Seven obsolete machine tools, two overhead traveling cranes and 25 machine tools damaged by fire are the rest. Only 32 employees work in the UNION at the end of 1945. The steel roof construction of two large halls has to be dismounted as reparation claim in May/June 1946. The buildings cannot be used for the time being. The former managing director Erich Ziegenhals requested the resumption of the production on August 3rd, 1945. The Soviet administration admits him to produce again vital machines in  UNION. From October 27th, 1945, the new production begins on the base of the orders of the Soviet Military Administration.    On December 1945 the German Central Administration of Industry in the Soviet Occupation Zone directs the putting into operation of the plant. The first steps are repairs to some factory buildings and hired machine tools. 34 employees can again work in two usable workshop halls of 2000m² in spring and summer 1945. Now it is possible to build new machine tools. There is a very high demand for small  boring and milling machines. UNION is the only producer for them in the Soviet  Occupation Zone. In 1946 six new machines are made of component parts, which had not been dismantled. Indeed, these machines must be delivered into the Soviet Union as reparation claim. 44 employees work for UNION at the end of 1946. Some other firms have hired parts of the workshop halls, because their buildings were destroyed completely. At the beginning of 1947 a dangerous situation arises for UNION:  the State Government of Saxony announced, that the factory must be blasted away, because the Allied Control Council had classified the enterprise into “Rüstungsstufe I“ (that means a factory, that has been very active for the German armament). Appealing that classification to the Central Post Headquarters of the Soviet army in Chemnitz this order was not carried out. During the next coming years the rebuilding is progressing slowly but steadily: they produce three machines in the first quarter of 1948. With the beginning of the second quarter five or six horizontal boring and milling machines are produced. 60 employees work again in the production, seven of them are locksmith apprentices.   

3.2. UNION becomes a Government Owned Factory (VEB). Social care for the staff  
 From June 30th, 1948, after expropriation, UNION uses the firm-name “VEB Werkzeugmaschinenfabrik UNION Chemnitz“ and is under the sovereignty of the State Saxony. In 1948 twenty machines are manufactured, twelve of them are delivered to the Soviet Union as reparation, the others are exported into four countries. The outstanding quality of the machines increases in  the demand for them and in the rise of export. Meanwhile UNION is well-connected to the Federal Republic of Germany, the United Kingdom, India, Brazil, Japan, Italy, the Netherlands, Poland, Hungary and Austria. But UNION also delivers to Turkey, Scandinavia, France, Canada and to the USA. Not only the production but also the further rebuilding of the enterprise increases the demand for them: a dining-hall and rest - rooms improve the living condition for the staff; the skylight is being glassed again and a second heating boiler is installed. For the year 1950 UNION was made the condition to reach again the production capacity of 1936. In 1950, 55 horizontal boring and milling machines can be delivered, 30 of them to factories of the German Democratic Republic (GDR). Now 180 employees work for the enterprise. The performance of work of each employee increases  by 17% from 1949 to the first quarter in 1950. The integration of UNION and the factory “Fritz-Heckert-Werk“ branch II, is being prepared. The plan prescribes 107 horizontal boring machines for 1952 and 20 millers as war reparations. For the first time the so-called “organized work of innovators (German: Neuerer) is introduced. (“Neuerer“ is the German word for employees, who make proposals how to improve products or to work more effectively). 25 proposals of these innovators are used.
horizontal boring machine BP 100 in 1953 Like in all big enterprises of the GDR the Socialist Unity Party of Germany and political organizations take also part in the administration. Moreover, general measures are introduced like in all GDR factories: from 1953, operating collective agreements (BKV) are signed. The management of the factory and of the trade union account for its realization each quarter. The BKV also contains several annual measures, e.g. the carrying out of summer camps for children, Christmas parties for children and seniors, cultural events, etc. By and by the BKV contains more projects in the following years: holidays for the employees are organized and holiday homes in Hungary, Poland and in the home country are rent; a new factory - kitchen is set up, there is more childcare in kindergartens and day-nursery; a so-called company - doctor ensures the medical care; there are grants for flats or holiday trips. In 1953 the city of Chemnitz is renamed Karl-Marx-Stadt. In 1954 the Ministry of Mechanical Engineering orders that the factory has to give part of its production to another factory and UNION in return has to take over the production of gearings. From 1952 till 1958 the enterprise aimed at some important projects, for example: enlargement of the machinery, reconstruction of the manufacturing departments, and the creation of an own design office. The reconstruction of the 2000 m² large hall for the large-scale manufacturing was a great step for the increase of the production: Starting in 1958, the annual factory – sports - competition is a highlight for a lot of employees. In 1958 UNION is equipped with 85 machines, 33 machines are used in shifts. From 1963,  the operational plan is structured in way, that everyone exactly knows, which work performance he has to provide. Several proposals of the innovators help to make  production more effectively. In 1963 a licence is granted to the United Kingdom for  manufacturing horizontal boring  machines. At the beginning of the 60s the big firms in the GDR were ordered by the government to produce consumer goods. From 1963 Therefore UNION therefore manufactured shelves and two-wheel trailers for private cars. 1964 is not an easy year for UNION, because of the crisis in the western countries. The plant achieve a lower export-rate. Moreover, the machines of a Czech plant are a strong competitor  on the world market. Only after having fulfilled special wishes of the customers the firm could export 202 horizontal boring machines. In the same year several incentive wages are introduced for the staff and also a premium system for managerial employees, masters included. Since 1965 new machine types are being prepared for the production. This requires a variety of conversions within the factory, for instance the internal transport system is changed and the machines are used more efficiently. But all these measures cause  blacklogs in 1966. There were difficulties with the serial production of a new developed machine, because production started without a previous pilot production.That`s why it could not be exported. As  the economic situation in the western countries increases in the fourth quarter of 1967, it is possible to export 228 of 262 produced machines. The machine BFT80 BFT90 will be further developed. You will be introduced at the Leipzig Spring Fair in 1968   

3.3. UNION gets leading exporting firm for machine tool construction.  Integration of Hungarian and Vietnamese workforces. Introduction of polytechnic teaching. UNION enters into combination with the machine tool plant “Fritz Heckert“.   
In December 1967 the GDR government sets UNION to become the determining export firm. for machine tool construction. Therefore more material for import is provided. In 1968 Hungarian juvenile adults work in the factory. They are fully integrated into the everyday life of the enterprise. At first they get a vocational training in the factory. UNION buys three plots and disperses subsiding departments there in 1968. Now 430 employees work in the enterprise. The average wages for workers increases to 3,25 Mark per hour. The development of the first numerical controlled horizontal boring and milling machine is an important step in the production.
numerical controlled horizontal boring and milling machine BFT90/4 NC in 1970 Polytechnic Education is introduced on September 1st, 1958 and UNION is integrated with the subject ESP (introduction into socialist production) and UTP (training in production). Pupils of three schools in Karl-Marx-Stadt get their lessons in UNION. At first teaching is held in the factory, but from September 1969, a building - bought for this purpose -  serves as “Polytechnic Centre“. 500 pupils on average - among them blind and visually impaired pupils – are trained here to work on metal materials.
Polytechnic Education in the SixtiesThe enterprise erects a hall in light-gauge construction in 1969 and 1970. The first numerical controlled machine is exhibited successfully at the fairs of Leipzig and Hanover and is sold very profitably in the so-called Non-Socialist Economic Countries (NSW).The Machine Tool Kombinat “Fritz Heckert“ is founded in 1969 and UNION becomes part of it.
Logo of the Machine Tool Kombinat
“Fritz Heckert”

By that association the world-wide biggest economical unity in the field of machine tool construction  is established
The basic idea of this foundation is the combining of capacities of research and development, i.e. development from the procedural single machine to the function-based problem-solving machine and manufacturing systems. Data-processing is involved into this process . 42 Hungarian colleagues begin to work in the factory in 1971. For two products UNION has been awarded the seal of approval “Q“. UNION has also achieved further progress in the social area, for example, the heavy physical work is reduced, the medical care is intensified; there are special means to facilitate work for women. The production of consumer goods is extended by parts for house-hold mangles, gas – thermal – units and hand drills. 

3.4. UNION under managing director Wolfgang Becker. Important results in export. Construction of machines with microelectronic control and laser technology. 
Diploma engineer Wolfgang Becker becomes managing director in 1972. Under his management UNION has achieved world level in the manufacturing of horizontal boring machines, that`s why   export becomes outstanding successful.
Wolfgang Becker (geb.1937) directs the operation almost without interruption since 1972 over 30 years until his retirement in 2002.   Under his leadership, the company successfully developed further and may also depend on the political changes in 1990, compete in the world market.
Measures of rationalization allow to make assemblies in a shorter time. The so-called “Street of the Best“ (i.e. Gallery of the best workers) is introduced in 1972 and is evaluated monthly. So outstanding performances are honoured and other employees should be stimulated. A room for electrical engineering and electronics is installed in the polytechnic centre in 1972. This is a base for the good professional training of future skilled workers. The management pays attention to the apprentices. Immediately after having absolved the basis training, the trainees are getting involved in production teams. Instructors and masters assist them till they passed  their vocational qualifications. By the mean of the so-called “Fair of the Masters of Tomorrow“, youth is involved to find solutions for main issues. In 1974 the general manager of the enterprise orders that three factories are integrated in UNION,  now 953 employees work in the factory. The documents of the enterprise show, that from 1971 till 1974, compared to the years 1966 to1970, the factory achieves outstanding growth rates. This success is essentially caused by the numerical controlled top-quality products, but also by such measures like splitting up manufacturing processes, improvement of the specialization, cost savings and more intensive use of scientific and technical knowledge. As a result of all these efforts a processing machine awards the gold medal of the Leipzig Spring Fair in 1976. A new department is founded: “Organisation and Data Processing“, #that promotes the smooth co-operation of the four parts of operation of the company and also organizes a close co-operation with three permanent co-operation partners. A catastrophic natural disaster hits the factory in the months July and August 1977, as three consecutive floods overflowed the area. In June all the factory terrain, which is on the bank of a creek is overflowed. The watermark in the manufacturing halls reaches a level of 25 cm above the floor.  The total loss is approximately 400.000 Mark.    
The flood in summer 1977 In 1977 newly developed machines with a high proportion of electronics part are exhibited at several international fairs, among others in Hanover, Bogotà, Milan, Buenos Aires and others. From 1976 till 1980 UNION can increase the export-rate into western countries by 1,4-fold, compared to 1971 till 1975 . In 1980 the mechanical manufacturing and several assembly processes are profoundly rationalized and the “Technological Centre Horizontal Boring“ is established. Incentive wages are introduced in the same time. From 1981 till 1983, 81 Vietnamese people are integrated in the factory and educated to become skilled workers. They also take part in many social activities and use the social institutions. From the years 1982/83, all boring and milling machines are fitted with micro-electronic control.  Meanwhile the hourly wage rate of the workers rises to 5,50 Mark on average. The government of the GDR orders the further expansion of the consumer goods production and now the factory also produces music-stands and rabbit hutches. Since 1986 the enterprise concentrates all energies onto the production of a boring and milling machine based on laser processing. This machine is developed in co-operation with institutes for science within 15 months. New is, that for the time in the GDR a work piece can be formed by laser three-dimensional.
Laser machining system LBA 1600 CNC von 1987 Beside the development of latest machines, great attention is paid to service. There is a permanent intensive education for fitters, training courses for customers of horizontal boring machines and the instruction of the maintenance - staff, courses for programming, etc. A large spare part stockroom allows to deliver ordered parts within a short time. 90% of the produced machines work in 42 countries. With the beginning of 1976, 220 till 260 processing machines can be delivered per year. Since the middle of 1987, the development of UNION also stagnates. The government of the GDR does not react at all or only little on the world politics and “Glasnost“ and many citizens leave the GDR. This situation also causes consequences for UNION, i.e. the number of employees decreases. Only by greatest affords It is possible to keep the former level of results till 1990. It is also possible to fulfill the governmental orders for export and planning of the production. But the serial production of a new product line is delayed year after year. The recruitment of qualified colleagues for research work and development becomes more and more difficult. Nevertheless, some tasks still can be realized successfully: processing time for assembly and mechanical manufacturing decreases, functional assemblies are developed, the annoyance  by noise and pollutants decreases.   

4. The company after the political change to bankruptcy in 1996   
In 1989, the operation employed approximately 900 employees currently. On June 1st,1990 the company is converted in the "Saxon tool UNION GmbH Chemnitz" and is under the administration of the Trust Agency Berlin. With the political change, the UNION has to deal with major changes to the corporate governance and corporate development. Making matters worse was that in 1990 in all industrialized countries an economic stagnation began, which led to an economic downturn in Germany, particularly in the metalworking industry. However, the collapse of the Eastern European markets had not such drastic consequences on the company as in many other formerly state-owned enterprises. The reason for this was that the main markets were already during the existence of the GDR, mainly in western Europe, the Federal Republic of Germany, Scandinavia, USA, Canada and South East Asia. Only 5-8% of the volume of exports were sold in the countries of the Eastern bloc. Despite lack of orders, the negative development could be kept within limits. In 1991, the Treuhand sold, the Company 74.9% to the Schiess AG Düsseldorf and 25.1% to the Klöckner & Co AG of Duisburg.   With this privatization, the development of new mills in the company was given up completely. This decision was for the development of the company of great decisive importance. With the introduction of new organizational structures continuously jobs were lost in the company. Thus, the number of employees fell from 658 in 1991 to 197 in 1993. Despite these adverse conditions  for a good marketability of the UNION-products is given. The place Chemnitz, Zwickauer Strasse  is abandoned in 1992 and relocated to the newly constructed assembly hall of Chemnitz, Zeisigwaldstraße.   The staff in Chemnitz met all the more, the decision of the Schiess AG, the place Chemnitz to close the and transfer to Gera into the sister company. By the determined resistance of the Chemnitz workforce (factory occupation in December 1992) and the personal commitment of many years the operating and managing director Wolfgang Becker corrected that decision.        Operating occupation by the employees in 1992 Finally it comes to the transfer of Gera plant on January 02, 2004 and to transfer of the entire production program, including the development of new products to Chemnitz. Meanwhile, the Klöckner & Co AG of Duisburg had sold in had his share in the Schiess and Schiess- Moweg AG Dusseldorf GmbH November 1993. The Schiess AG Düsseldorf by the Dorries Scharmann AG Moenchengladbach was in turn acquired and thus was the sole companion of the UNION. in March 1994 The Dorries Scharmann AG goes into bankruptcy in early 1996 and drags along  the UNION Chemnitz into the insolvency no fault. The plant construction started in 1995 in Chemnitz, Neefestraße comes to a halt. The UNION could not meet their payment obligations. The result was that the UNION GmbH Chemnitz declares itself bankrupt. in March 1996.
At this time 145 people were employed in Chemnitz. The bankruptcy proceedings were opened on. May 31st 1996. For managers lawyer Joachim Schneider, Jena was appointed to be manager.   

5. The UNION as a company employee until 2009
Already with the application for bankruptcy was formed, a 15-member concept group of 15 senior executives of the company in April 1996with the aim to establish the new business again.With that a very unusual applied with the support of Trade Union, Commerzbank Chemnitz and Dresden as well as the Free State of Saxony succeeded each in the project group with considerable contribution of the insolvency administrator Joachim Schneider and the Managing Director Wolfgang Becker to convince 100 employees with 10,000 DM (€ ca.5.100) equity to form an private Ltd.It is essential to mention that there were no job guarantees for these 100 employees and no safety to receive ever the paid-up equity returns.That despite these uncertain prospect 100 employees assumed this personal risk.This speaks well  to the close relationship with the company and the strong cohesion of the workforce.
Excerpt from the conception establishing the Employees Society of the Saxon State Ministry for Economics and Labour in 1996 (Sales by units and value)
After a thorough examination of this extraordinary concept by reputable accounting firms and its operation as at September 23 1996 was the new UNION Werkzeugmaschinen GmbH Chemnitz was established as a company employee. 100 employees are shareholders in the company. An condition of the banks: The business manager must come from the old federal states. On October 01,1996 the first 13 employees started their work. Already 100 shareholders were all working as employees on 30 June 1997. The company acquires it, carcass of a new modern factory building on the outskirts of Chemnitz Neefestraße by a purchase agree dated 01.December 1996, from the bankruptcy estate of the old UNION and bring the construction to a successful end in July 1997. The new site could finally be put into operation in November 1997.
The new factory on the outskirts of Chemnitz in 1997 The company at first as a company employee in subsequent years continued success. Turnover rises to 33 million Euro, net profit to  2 million Euro.                   Demolition of the old administration building Zwickau Street in June 1999
Photos: Klaus-Dieter Pompe

    Chancellor of Germany Gerhard Schröder visited the company on May 02, 2001

Machining center UNION PCR 150
in 2000


The director of operations Wolfgang Becker retires in 2002 after 30 years of meritorious service at the helm of the company for reasons of age. The main bank makes doubtful the ownership structure the first time in 2004 and calls for a important exerted investor. This is accounted for by the growth retarding effect of the company employees. Meanwhile, the number of employees has risen to 180, but only 74 employees held shares. In that regard, a division of interests was more and more noticeable. Ultimately, the shareholders decide on a sale of 61% of the shares on 01.07.2007 to the "nimbus hands-on investors" finance company. The employee company still retains a blocking minority. , The identification of the employees had suffered with the factory with this decision. The model of employee company had reached its limits. Finally, the "nimbus" bought to all remaining employees share in 2009. The shareholders each received € 15,000 for his share of € 5,100. So that employees company was history. The global economic downturn economy also leads in the UNION in 2009 to temporary short-time working, but that could be cancelled at the end of the year. But it remains an outstanding performance of employees of the UNION, who, with the support of the liquidator, IG Metall, the state and the banks with this form of ownership prevents the downfall of the traditional company and led the operation back on track. 

6. The machine tool factory UNION in composite of “HerkulesGroup Siegen”
In October 2010, hold the "nimbus"  80% of the shares of the company and the Managing Director, Mr. Glanz 20%. Finally, the "nimbus" sold the UNION in June 2011 to the "Hercules Group" Waldrich Siegen.

Logo of the UNION,in the Association of HerkulesGroup
The machine factory “Herkules Hans Thoma GmbH”is a company with 100 years of tradition, which is world market leader as  a manufacturer of rolling machines, roll shop equipment, large lathes and milling machines The headquarters of the international company with manufacturing facilities in the U.S., China and India is in Germany (Siegen).The family enterprise is managed by Christopher Thoma in  third generationWith the purchase of UNION Chemnitz as a leading global manufacturer of horizontal drilling and milling machines In June 2011. The Herkules Group realized the strategic expansion of its product portfolio.Today, 1,800 people worldwide are in all enterprises of the Hercules Group, of whom 1400 at the four sites in Germany Siegen, Meuselwitz, Burbach and Chemnitz.Production facilities, service centers and sales offices in all major industrial countries of the world  ensure proximity to the customer in order to offer  "tailor-made" products.It is part of the strategy of the Hercules Group, the independence of the UNION in development and in production, but it is also useful to have realized  as centralization in marketing, sales and controlling were realized.First synergies with Waldrich Siegen  are recorded with the joint development of new milling heads with up to 45% higher performance.The common use of the distribution network is currently a remarkable success with the sale of six boring mills to China.
The UNION it´s  product profile of horizontal boring and milling machines with the highest precision and quality thus arranges itself very well into corporate group of the Hercules Group.The company achieved a turnover with 180 employees and of 35 million euros in 2012.The staff in working at further developments of machines and the construction of a new assembly hall is provided.  The new big boring mill PCR 260 has a vertical headstock adjustment of 10m and a stator transverse displacement of 4m.
The person shown symbolically illustrates the dimension of the machine.
  The company with the knowledge and experience of 160 years of machine tools faced the tasks of tomorrow. Today the Chemnitz plant satisfy through the modular design of the products, performance and precision. On this solid basis, the UNION look forward in the coming years with confidence in a positive future.       

Norbert Komorek
Dr.Jochen Kleinhempel
                                                                                                                                     Chemnitz, 30.04.2013           


Annex 1
Number of employees of the foundation from 1996 to 2012
2002 to 2010               ca. 170 
2011180Transfer to HerkulesGroup

Annex 2
Number of products manufactured in selected years
1877 83 
1914189beginning of World War 1
1939253beginning of World War 2
19464End of War
194931Founding of the GDR
1990201German reunification
199618bankruptcy  and founding of a new company
2012Etwa 35 
Source directory 
1.     Dr. Dieter Bock „Festschrift „150 Jahre Werkzeugmaschinenfabrik UNION Chemnitz 1852- 2002“ 
2.     Dipl.-Ing (FH) Wolfgang Becker, „160 Jahre UNION Werkzeugmaschinen-Fabrik Chemnitz“, 2012 
3.     „Handelsblatt“ September 15, 2009,Beitrag „Genug gekämpft“ written by  Katharina Slodczyk 
4.      Correspondence with  PR-  Herkules- Group Siegen   

Photo Sources 
1.     The report was created using the photos from the publication „150 Jahre Werkzeugmaschinenfabrik UNION Chemnitz 1852- 2002“ created by  
        Dr.Dieter Bock 
2.     Photos from Klaus-Dieter Pompe  

[ Edited Tue Jul 09 2013, 09:59pm ]
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