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An East German Manager Explains the Advantages of a Kombinat (July 24, 1972)

To convince the East German public of the benefits of "socialist rationalization," Wolfgang Biermann, the director of a machine tool factory, explains the benefits of a Kombinat, or combine. He argues that when different enterprises that produce the same product are combined into one corporation, the results are higher production runs, administrative efficiency, and shared social services.

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A Kombinat* is More than the Sum of its Factories

The workers of the “October 7th”** Machine Tool Combine [Kombinat] in Berlin have responded concretely and unanimously to the new sociopolitical measures: To exceed the 1972 plan for industrial goods production by two percent. This decision has been thought through carefully, takes many individual initiatives into consideration, and carries all the more weight because the collective had already set high goals for itself with the plan for 1972. At the same time, these initiatives also illustrate the type of effect that arises from the work of Kombinate. The effect results from the wise and far-sighted policies that our party put in place to concentrate production capacities in vital areas of the economy to achieve higher productivity for the benefit of all. But success does not come automatically. The mere consolidation of nationally-owned enterprises does not create a productive combine. The combine-effect [Kombinatseffekt] is the result of a planned division of labor, specialization, and cooperation between individual factories in the combine. In the process of socialist rationalization, the productivity of combines is further increased. This productivity is also the result of the consistent and uniform management of an experienced collective of 19,500 workers in eleven nationally-owned enterprises brought together in one combine.

The combine-effect can be measured and calculated in many ways. In accordance with the requirements of our combine, exports play a special role. If we assign a value of 100 to exports to [members states of] the socialist economic system when the combine was founded in 1969, then that number grew to 117 in 1970 and to 165 in 1971. Exports to the Soviet Union increased to 140 in 1970 and even to 208 in 1971. Exports to the non-socialist economic sphere increased to 133 in 1970 and to 175 in 1971.

The Reward was Gold at the Trade Fair

Since the creation of the combine, a basic principle could be realized step by step: The uniform management, planning, and execution of the production process. As a background step, this involved merging all of the factories in the combine into a unified whole by steadily increasing their individual responsibility for fulfilling their assigned tasks. It meant a farewell to some habits, some traditions. At the same time, the many positive experiences of the factories could be put to use on a larger scale.

Thanks to concentration, for example, we are in a position to manage and plan science and technology centrally. Thus, we were able, step by step, to reduce the fractious effects of the geographical and content-related fragmentation of research and development capacities in order to realize uniform technical principles. This was the precondition for the efficient organization and implementation of the division of labor process. In the combine, factories were chosen to set the standard for production processes and techniques for grinding, turning, and gearing. Among other things, this allowed the development and transfer time of goods entering production to drop from an average of 37 months in 1969 to about 30 months in 1972. The effort put into the development of the general conceptualization of all turning processes was reduced by 40 percent in the same period.

* A Kombinat – or combine – is a large integrated corporation that combines numerous factories making one product. The plural form is Kombinate – eds.
** The GDR was founded on October 7, 1949 – eds.

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