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The Scent of Steel Is in the Air

Memories can ambush you in the strangest places, at the most unexpected moments and from the oddest angle. I had such a memory ambush Tuesday when I was out on assignment to shoot footage and interviews for a special on "The Competitiveness of German Industry."

(A recent study had just concluded that, all the hemming and hawing about the structural inflexibilities and high labor costs notwithstanding, German industry came out as No. 1 on competitiveness in Europe and No. 2 -- only topped by China -- in the world.)

But back to memories, we went up to Germany's old industrial heartland, the steel and mining belt of the Ruhr district, which is composed of Essen, Duisburg, Bochum, Dortmund and Hagen.

We drove past mining complexes, turned into leisure parks and event centers, past derelict almost-ghost towns where the once-busy workforce for steel and mining had long left, and to the second-largest steel plant on the planet, the fully integrated steel mother ship of German steelmaker ThyssenKrupp.

And I was ambushed by memories because, you see, I grew up in one of those steel towns (in Hagen) ... Krupp, Hoesch, Eiken, Südwestfalen, Klöcknerwerke ... almost 100,000 people living off steel and related businesses there when I was a child. Now, NONE.

All the major steel plants there have long been closed down. Hagen has become a much prettier little town, the air is cleaner, old factories have either been pulled down or beautified. But you know what? The vibrant pulse, the heart of the town has stopped beating as well.

Back to Duisburg and ThyssenKrupp, almost ten square kilometers of steel plant, with furnaces, coke, pig iron, hot- and cold-rolling, the lot. And more than 120 years of steelmaking right there. Old parts of the plant from the late 1800s next to the most modern, most efficient 340-mill steel oven of 2007.

And here comes that memory ambush I was talking about, that familiar, slightly leaden smell that hangs in the sky. Not pleasant at all, this side of sickening, actually. And yet, what can I say. It smelled like childhood memories and home. It smelled GOOD. All those who grew up in steel or mining towns will know what I am talking about.

Now, maybe it's that old socialist heart of mine, but I always stand in awe of industries that actually produce something. And it can't get more awe inspiring than melting, cooking and forging steel! There is something archaic, primal about mastering red-hot steel. Think of Wotan, Hephaistos and Vulcan. If you've never been in a steel plant, do go. It's well worth it!

But visiting the ThyssenKrupp plant in Duisburg, talking to people about competitiveness and the mixed blessings about globalization got me thinking how important it is for a country like Germany to at least keep a reasonably viable manufacturing capacity in the country and what a problem it might be for countries like Britain not to have done so.

Not that Germany hasn't downsized dramatically over the past decades, from more than 700,000 jobs in coal mining, a mere 20,000 (and those are doomed, too, more is the shame, with the oil prices going where they do, coal mining might yet get interesting and profitable again before we know it).

A textile industry doesn't exist any longer, which also proved shortsighted. Turns out that the likes of Adidas or Nike could manufacture more cost efficiently in their respective home markets now; but as they have smashed the manufacturing capacities in their own countries to smithereens, they are now doomed to produce in China or wherever they have chosen to outsource to.

Which brings me back to what my (admittedly fundamentalist) economics professor at University said eons ago. One of his favorite theses was, even then, that the moment you focus on minimizing costs and not on maximizing business strategy, you are lost. Cost cutting is not a strategy, it's a defensive move. At best, an orderly retreat.

I thought he was a little harsh in his judgment then. Now I think he was candidly right.

Well, another whiff of leaden steelmaking air and it's back to Bankfurt.

Ciao for now or Tschökes, as we say up here in steel country.

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