Bochum’s declining economy

The observed disparities in regional labour markets are pronounced and permanent. There is a large disparity in the level of unemployment and wages between regions in Germany. Over a period of time there are regional differences.

The independent city Bochum in the administrative district Arnsberg is one of five regional centre of the Ruhr area and has got about 380,000 inhabitants. It is the second largest city in Westphalia and among the 20 largest cities in Germany. But this region is in a declining situation.

For years, factories in the city of Bochum closed, including alleged future industries such as the manufacturing and development of mobile phones from Nokia or the corporation Benq. Steel and coal were already on the decline longer before. And now after 50 years, Bochum will lose Opel and so one of the remaining large industrial employers next year, and that is a radical step.

Since 1962, Opel has produced in Bochum and Bochum-Laer-Langendreer. After almost 50 years, the Opel plant in Bochum will completely close its doors at the end of next year. More than 3.700 people will lose their jobs. But the question is: Why Bochum? The workers in Bochum are not less industrious than their Opel counterparts in Poland, Spain, England, Rüsselsheim and Eisenach. Since 1929, the Opel Adam AG belongs to GM, an U.S. automotive group. The business in Europe is declining for them, so GM closes some production sites. The main problem is, that Opel belongs to GM. Bochum needs some own sectors, which belong to the city.

The switch to new, highly productive sectors of the economy is in crises: Only a quarter of employees work in knowledge-intensive industries, only 11 percent have university degrees, half as many as in Munich or Stuttgart. The result is, that Bochum and it`s economy are shrinking. Between 2005 and 2011, the population fell by about 3 percent. By 2025 a forecast says, that Bochum will have the fifth highest population loss among 30 cities with a declining population, and it is expected to be about 6 percent. The people have to search new work in other regions. The best chances are if they are willing to move: In Baden-Württemberg and Bavaria in the south of Germany there are car supplier, which pay cash for these workers like in Bochum – so big is their lack of skilled workers.

Enterprises and workers are not spread evenly across the region, but they are concentrating in certain regions. There are important questions concerning the regional disparities of certain target variables such as employment, participation and unemployment. There are some factors that influence the spatial distribution of economic activity, such transport costs, market potential or spill over effects. With a view to sharing the infrastructure and suppliers and service structures, the transfer of knowledge and innovation and the regional matching of labour supply and demand are very important today. It must also be considered, that the importance of different factors over time changes, which in turn has consequences for workers, enterprises, regions and Institutions. Certain regions, like Bochum now, need to recognize these developments early enough, to be able to fight against them.

 

Sources:

http://www.spiegel.de/wirtschaft/unternehmen/opel-gibt-auch-das-zentrallager-in-bochum-auf-a-896829.html

http://www.manager-magazin.de/politik/deutschland/0,2828,894913-6,00.html

 

written by Timo Bug, Nicolas Lauer, Matthias Lerch

7 thoughts on “Bochum’s declining economy

  1. I have to guess 4 points.
    1. Opel vehicles are rarely bought, therefore, there is an over-capacity, which must be removed, otherwise you ruin the entire group GM.
    2. GM wants the Chevrolet brand position in the long term instead of Opel on the European market because of the reputation of Opel Is ruined.
    3. The workers were systematic ill-informed and advised from the unions and the work council.
    4. American companies are not used to strong works council and also strong trade unions. To avoid anger they prefer to close the company.

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  2. There are signs that the Ruhr area is shrinking a long time ago. In the 1960s and 1970s during the mining and steel crisis there was the first big wave of destruction productive workplaces and infrastructure with ensuing emigration. Bochum is only one city that is concerned by closing of workingplaces and migrate of big companies. It is very sad for the people who lived there for generations, because they will have sooner or later no other opportunity to move to another place to get not unemployed.

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  3. The problem is that there is a very high density in the whole Ruhr-area. Many years ago there have been many jobs due to the coal & steel industry. But as already mentioned there was a big loss of jobs through the omission of this sector. There are many people who are facing the problem of unemployment. They probably have no other choice than changing their domicile to find an appropriate workplace.

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  4. If large corporations close it is always difficult for the region and especially for Bochum to compensate these economic losses. The people will move to find work somewhere else and it doesn’t make it easier for Bochum but that is the logical conclusion. So Bochum could also gradually becomes a ghost town like other towns in the Ruhr region.

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  5. Recently, I heard a lot about this undoubtedly serious problem. Unfortunately, this is really sad because it concerns a large number of people. This situation forces them to make big changes in their life, such as searching for a job, change of residence, etc. The question is if it was impossible to do something with this? React earlier to help? I wonder also what measures the government takes to help people from Bochum. I think it is impossible that the city worked out the losses, however, there is always a chance.

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  6. It will be really hard to find a new workplace for the employees of Opel, because more than 3,700 people will lose their job. How can everybody catch a new position in a region where the economy is declining for a long term? It is nearly impossible for everyone. So a lot of people have to move to other regions and the area around Bochum will continue to become extinct. At my point of view, it is really incomprehensible, because in the second week of April 2013 the top of GM decided to invest four billions in the Opel daughter for the business in Europe. Why was there no chance for the factory in Bochum?

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  7. This decision is a blow to all the employees of the establishments and also their families.
    Unfortunately, Opel cannot cope in the automotive market in Europe, so goal was to eliminate all unnecessary costs mainly reducing unused production capacity. Opel is struggling to sell its cars in Europe, record significant losses and therefore needs to reduce costs. It’s a big loss for Bochum.

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