Rebuilding Glashütte

The watchmakers of Glashütte, Germany, are again producing the prestigious timepieces for which they are renowned, but with losses in the millions, it will be a long time before it’s business as usual in this flood-ravaged town.

Glashütte, a valley town of 2,500 residents, is located in the Erz Mountains south of Dresden, in the German state of Saxony. Upscale and luxury watch companies there include Lange Uhren (owned by the Richemont Group), which makes A. Lange & Söhne; Glashütter Uhrenbetrieb (owned by the Swatch Group), which makes Glashütte Original and Union Glashütte; Nomos; and Mühle.

Glashütte became a watchmaking center in the late 1880s—even today, it’s known locally as the “Valley of Watches”—and remained so until World War II, when Allied bombing destroyed most of its watch factories. What was left was taken over by the former Communist East Germany in the late 1940s. Since Germany’s reunification in 1990, watch firms have returned to Glashütte, which has rebuilt and revived its former role as Germany’s “Uhrenstadt,” or “City of Watches.”

Until Aug. 12, 2002.

On that day, the heavy flooding from torrential rains that had devastated eastern Germany in August—”the biggest natural disaster in [Germany’s] modern history,” according to the German government news service—ravaged Glashütte and its watch companies. A dam holding back the Priesniz and Müglitz rivers broke in the late afternoon, sending some 50,000 cubic meters of muddy floodwaters, 12 feet deep, raging through Glashütte. By the end of the cascade, virtually every street in town was impassable and damaged. Bridges and some buildings were destroyed. The phone, water, gas, and electrical systems were out of order. Local roads and rail lines were destroyed, and there was no access to the town. It was three days before military engineers could establish an emergency route into Glashütte.

At least two people died and 20 were reported missing in the flooding. None were watch company officials or employees, though many of these lost their homes and belongings or suffered extensive damages.

Under water. The Glashütte watch companies suffered heavy flooding of ground floors and basement storage areas; some damage to air conditioning, heating, and electrical systems and furniture and equipment; interrupted production; and lost man-hours.

The director of SUG-Gehäuse-Fabrik, which makes high-quality watch casings, told Uhren Magazin that “everything [was] under water. All machines, all computers, simply everything.” The company didn’t expect to resume production for half a year.

At Glashütter Uhrenbetrieb, water damaged machines on its ground floor, where mechanical movement parts are made, as well as some completed watches. The company didn’t resume full production for two weeks due to cleanup efforts and the absence of many workers who were affected by the flooding or assisting in the cleanup. Of the company’s 220 employees, at least one-third lost homes or belongings or suffered related damages. By September, however, about 80% of the company’s employees were back at work.

The Mühle watch company, a small family firm established in 1869, sustained some $110,000 in damages. The building was completely surrounded by water. Owner Hans-Juergen Mühle and his son Thilo were trapped in the building for two days and nights, without electricity and with no phones to report their situation. “We were prisoners of the flood,” Mühle later told Uhren Magazin.

At Nomos, owner Roland Schwertner estimated initial damages at $150,000-$200,000, including laser equipment in the flooded cellar. Some employees who lost houses or couldn’t return home had to camp out on the building’s top floors, and the old Glashütte train station—which Nomos had recently bought but hadn’t yet renovated—was badly flooded.

Lange & Co., which makes more than 10,000 luxury watches annually, said in early September that damages included technical and operational equipment (computers, air conditioning, heating, gas), some furnishings, and the outside parking area, plus lost production days. Lange, one of the oldest watch businesses in Glashütte, reopened its historic 1873 headquarters (which includes production, after-sales service, finishing and engraving departments, and a watchmaking school) in December 2001, after a $4 million 18-month renovation. Although there was no damage to the school, it was closed for several days.

Millions. Some watch firm officials have since told JCK that the flood’s impact on their operations wasn’t as bad as first feared. Initial estimates by Glashütte’s watch companies put total losses at about $1.5 million, not including the extensive clean-up costs, but the final figures will probably be higher. Lange & Co., for example, said in early September that its damages alone would total “several millions” of dollars.

Despite the ongoing clean-up and repairs—including removal of debris, damaged furnishings, and equipment—as well as insurance assessments, Glashütte’s watch firms resumed production before the end of August, though not always with full staff, and business was almost back to normal by September. Lange & Co., for example, announced that it was inaugurating its first North American sales network for its watches, starting in October.

Some operating problems, though, continued well into autumn. Even weeks after the disaster, the town was closed to normal traffic. Only vehicles with a special permit were allowed entry. Watch company employees living outside Glashütte had to park outside the town and take shuttle buses provided by their companies, a situation that will continue until the town’s streets and transit system are restored.

For the watchmakers, there also were logistical problems. Because of the destruction of the region’s infrastructure, “the transportation of all things—from catalogs to sending watches all over the world—now takes a longer time,” says Katerina Bohme, press spokesperson for Glashütte Original. Some companies ordered a car to come to pick up watches and take them to trucks outside town for transportation.

Starting over. As for Glashütte, “Our city, practically speaking, is back to the beginning,” said Mayor Frank Reichel after the disaster. “We must do everything humanly possible to rebuild Glashütte.”

“The school, restaurants, most businesses and workshops are closed,” said Nomos owner Roland Schwertner in a letter to his authorized dealers. “Worst off are people who have lost their homes, furniture, and clothing. The economy and the watch business of Glashütte have been badly hurt.” Full recovery of the town will probably take years, said watch and city officials. “Just rebuilding the streets and bridges will probably take a couple years,” suggested Thilo Mühle.

The watch companies are doing their part to help both employees and Glashütte recover. “We must help the town and not only ourselves,” says Schwertner of Nomos, one of the watch firms leading recovery and fund-raising efforts. “Everyone in town is helping [each other].”

The Swatch Group is financially assisting Glashütter Uhrenbetrieb employees who lost homes or suffered heavy losses in the flooding. It also donated to Glashütte’s recovery fund. Alain-Dominique Perrin, chief executive officer of the Richemont Group, visited Glashütte at the end of August and promised Richemont’s full support to Lange & Co. and its employees. Meanwhile, Mühle has run its own ads in regional publications urging contributions to the city’s recovery fund and is offering its new $1,200 high-tech S.A.R. Rescue Timer watch as top prize in a lottery for Glashütte contributors.

Glashütte watch companies interviewed by JCK said that despite the catastrophe they have no plans to leave the town. “Watchmaking is the basic business of the city,” said Katerina Bohme. “We will continue here, and we will help the city and its people rebuild.”