The Bigger They Come

Hamburg's influential daily. Die Welt, had called him "the favorite child of West Germany's economic miracle." Fortnight ago, shortly after he had startled West Germany by admitting that he could not meet July's bills (TIME. Aug. 3), Industrialist Willy Schlieker, 48, was declared bankrupt by a Hamburg court. Up for liquidation was Schlieker's entire domain of 23 shipbuilding, steelmaking and trading companies that grossed $200 million last year.

Undercapitalization and overexpansion were the roots of Schlieker's troubles. He had built his entire empire on a financial base of only $5,000,000, depending on advance payments for the ships he was building to ensure a steady cash inflow. But when the shipbuilding market softened, buyers balked at paying in advance, and Schlieker was caught short. A preliminary audit put his total indebtedness close to $25 million.

Schlieker might have avoided bankruptcy had anyone cared enough to bail him out. The city of Hamburg offered to guarantee loans up to $6,250,000 if Schlieker's 3,500 creditors would chip in enough money to put him on a solid footing.

There were not enough takers. The powerful German banks also cut off his credit; now other companies may be able to pick up the pieces of his empire at bargain prices. "My creditors," cried Schlieker, "stiff-armed me and let me starve." In his rise to the top, Schlieker had done little to endear himself to bankers or fellow industrialists. He operated as a lone wolf, got rich by successively working for the Nazis as a steel expert, selling millions of dollars worth of steel to Communist East Germany, and swapping German steel for U.S. coal during the Korean war. Old-line German businessmen regarded him as "nicht salonfdhig"--not acceptable in drawing room society.

The Hamburg city administration felt small compulsion to go it alone to save Schlieker because his Hamburg workers were certain to land new jobs quickly in labor-short West Germany. So many of them did, in fact, that the neighboring shipyard which undertook to finish three of the big ships now on Schlieker's ways was having difficulty recruiting men.

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