Future Atlas

Lakeside Idyll Hides Industrial Hothouse

Friedrichshafen aerial panorama at night. Friedrichshafen, Baden-Wurttemberg, Germany.
Friedrichshafen, a quiet well of creativity and industry.
  • Why it matters

    Why it matters

    • The Lake Constance locales drew high marks in business potential according to the latest Future Atlas rankings by Prognos.
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  • Facts

    Facts

    • Friedrichshafen and neighboring Lindau have strong industrial roots with companies like ZF Friedrichshafen, Liebherr-Aerospace and a Continental unit.
    • Friedrichshafen is famous for Ferdinand Graf von Zeppelin’s invention of the zeppelin.
    • While the lake district got high marks in a ranking of economic potential, the region faces space, transportation and skilled-labor issues.
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    Audio

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Say “Lake Constance” in southern Germany, and people usually think summer resorts and apple juice.

But it wasn’t tourism, fruit and wine that made the region that spans the industrial city of Friedrichshafen immensely prosperous.

The district’s auto parts suppliers, machine manufacturers and aerospace industry helped give the region its high rating in economic potential according to the Future Atlas 2016, an innovation ranking by Prognos, a research institute.

One of the region’s most famous forefathers summed up the region’s can-do attitude.

“You only have to want it and believe in it, and then it will succeed,” was one of Ferdinand Graf von Zeppelin’s favorite sayings. He lent his name to the rigid airships that achieved high-flying success, if only for a short time, at the beginning of the 20th century.

“Innovation has tradition here.”

Benedikt Otte, Managing director, Board of Business Development Bodenseekreis

People in the area still echo Mr. Zeppelin’s saying in his homeland at the foot of the Alps.

One is Angelika Zimmermann, who runs a company that makes passenger seating for aircraft. She and her husband set it up in 2008 and ZIM Flugsitz is now a mid-sized company with 140 employees.

She proudly showed off an invention for Swiss Air passenger seats of the future, releasing a seat’s tray from its stowed position in the back of a chair. The tray was only attached in the middle seat, not held, which usually is the case, by two brackets. A little more legroom for the passengers. “We patented that,” she said.

She swished through the production hall, which is too small, she said, although they’ve expanded more than once. She passed her hand along three-seat rows for an Asian airline, black chairs with USB ports for an Australian airline and some rather spartan-looking blue stools.

“It’s all handmade.”

Ms. Zimmermann and her husband knew right off they wanted to plant their business on the banks of Lake Constance – not just because the couple had worked on the lake for years, or because they knew the bank managers and could likely get the money they needed. “Lake Constance is an old aeronautical region and one of the biggest aviation clusters in Germany,” she said.

Amid the picturesque hills and pretty lakes, there are other heavy hitting industrial firms, starting with ZF Friedrichshafen, which supplies auto parts, and driveline manufacturer MTU Friedrichshafen, which is now part of Rolls-Royce. There’s also a clutch of small and midsize family-owned companies.

Germany’s Tin Valley is riddled with researchers, inventors and industrial firms.

It’s inventions like the passenger seat tray that earned the Lake Constance district and Lindau in the state of Bavaria such strong rankings by Prognos. Only in two other regions in Germany do as many people earn their money in research and development.

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“Innovation has tradition here,” said Benedikt Otte, the managing director of the Board of Business Development Bodenseekreis.

But somehow the area is not known for this. Nobody took the Zimmermanns seriously when they first launched their passenger seat company on the lake’s northern shoreline. ZIM Flugsitz started production without a single customer.

This way, too, the business couple are in the tradition of the most famous person from Friedrichshafen: Mr. Zeppelin, who settled in the city to build airships. After one of his dirigibles burst into flames, Kaiser Wilhelm II is said to have called him the “dumbest of all Southern Germans.”

The Kaiser subsequently revised his opinion, as the airship conquered the skies. But later, in the truest sense of the word, it crashed and burned once and for all in 1937 when the Hindenburg was destroyed in a spectacular fire.

Luckily Friedrichshafen was already on the way to becoming a business location.

Mr. Zeppelin lured to Lake Constance all kinds of people who liked to experiment with building things and then form the companies to build them. When his airships’ gears caused problems, the company ZF Friedrichshafen was created. Today, it employs 130,000 people.

Because the engines weren’t working well, he took up with Wilhelm Maybach and his son, Karl, who developed the motors for the mighty airships, and laid the groundwork for the company that became MTU Friedrichshafen.

A talented engineer, Claude Dornier, who developed a rotating hangar for the airship enterprise, later built up the eponymous aircraft company on the lake that today is part of Airbus Defense and Space.

“The airship was the nucleus of the region’s economic strength,” said Peter Gerstmann, who heads Zeppelin, the successor company to the original airship firm. Today, it has nothing directly to do with airships. The company’s €2.3 billion ($2.56 billion) in sales are primarily generated in the marketing and servicing of Caterpillar construction equipment and plant engineering.

“Zeppelin no longer had a product after the war, so the company had to reinvent itself and transitioned to plant engineering and Caterpillar,” Mr. Gerstmann said.

There are other thriving businesses in the area. The nearby town of Tettnang has blossomed into a hotspot for sensor producers. And all the action isn’t necessarily happening in the city.

One fly in the ointment is that there aren’t many other cities nearby, making Friedrichshafen’s airport enormously important for the area’s businesses. Planes travel to and from Frankfurt, Berlin and Hamburg at hours suitable for business.

Attracting skilled people is another struggle. The companies on the lake are having a hard time finding skilled labor and trainees, even with Baden-Württemberg Cooperative State University’s technical campus in Friedrichshafen. There aren’t many apprenticeships for workers which leave company representatives reaching out to the country’s big engineering schools to draw people to a “career in the South.”

Almost everybody around the lake says, “Once you’re there, you never want to leave.” If you want to be cheeky, you could say that apart from the airport, that’s probably because it’s hard to find a way to get out. After all, there’s only one highway around the lake. It can barely handle the commuter traffic, and when the weather heats up, it’s chockablock with summer vacationers. The railway lines still haven’t been electrified, earning the area unflattering nicknames like “diesel hole.” 

In neighboring Lindau, across the state line in Bavaria, the situation is similar: unemployment under 3 percent, industrial businesses and a high level of education. Here, only 25 in 1,000 students leave school before graduation; in the rest of Bavaria, it’s 40 in 1,000. Most workers drive out each morning to one of the bigger companies, whether it’s Liebherr-Aerospace, an industrial supplier, or a Continental unit that develops driving assistance systems. Added to that are food producers like Hochland.

“The economy is broadly based,” said Bavarian county commissioner Elmar Stegmann. Only every fifth worker is employed in retail and tourism, although the district boasts both the lake and the alpine Allgäu.

For companies which are doing well, the problem is where to expand. They’re constrained not only by space but also residents anxious about more traffic.

That’s a question for Ms. Zimmermann and her husband. Having outgrown their lakeside location, they can’t find bigger, affordable properties nearby. So the Zimmermanns took shovel in hand to lay the cornerstone for a second production site in Schwerin, a lakeside town way to the north. They’ll be closer to customer Airbus, and the port city of Hamburg is easier to reach.

It isn’t space that’s the difficulty for the Lake Constance area. In all its serenity, local economic developer Benedikt Otte says, the biggest hurdle is “making it known that we are an economic region.”

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Stefani Hergert reports on education for Handelsblatt. To reach the author: hergert@handelsblatt.com

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