Willy's Woes

Of all the "wonder boys" thrown up by Germany's postwar economic miracle, none rose faster or higher than jowly Willy Schlieker (rhymes with bleaker), 48. Born in the slums of Hamburg, Schlieker started out as a clerk in a law court, at 28 was chief of wartime steel allocation for the Nazi government. After the war, capitalizing on his Ruhr contacts, Schlieker built up a steelmaking, shipbuilding and trading empire that last year grossed $200 million. Last week, two months after he had been featured on TV as one of Germany's richest men, the bottom fell out for Willy Schlieker.

To the astonishment of all West Germany, the Willy H. Schlieker KG company, which embraces four of Schlieker's 23 firms and operates his highly automated Hamburg shipyard, admitted that it could not raise the cash to meet $3,500,0001n debts due at the end of July. The firm appealed to a Hamburg court for a form of temporary receivership aimed at avoiding bankruptcy. In part, Schlieker's difficulties simply reflected the troubled state of the whole German shipbuilding industry, which is increasingly hard pressed by competition from state-aided shipyards in other countries. But Schlieker's real problem was that he had built his whole empire on a capital base of only $5,000,000, and instead of laying away adequate cash reserves had plowed all his profits into headlong expansion.

Five Days, Five Deaths. This worked well enough so long as the post-Suez crisis shipbuilding boom held up and eager purchasers were willing to make advance payment on ships, thereby assuring Schlieker a steady cash inflow. But lately, with a decline in demand, he has been obliged to agree to payment only after delivery. Result was that the cash collected by his shipyard dropped $14.5 million this year.

In its court appeal, Schlieker's firm pointed to a $50 million backlog of shipbuilding orders and offered to pay 50% of its debts within two years. If the court and creditors agreed to receivership on these terms, the company would continue to operate under a state-appointed administrator. There was also some hope that Schlieker KG could avoid receivership entirely by working out a rescue operation through the banks. During the week, the Dresdner Bank arranged to beef up Schlieker's capital base by $1,000,000, and Munich Private Banker Rudolf Muenemann, another of Germany's postwar millionaires, hustled up to Hamburg to huddle with Schlieker. Said Schlieker with tears in his eyes, "In the past five days, I have died five deaths."

Shakes in the Street. In the end, since many of his companies are not directly affected, Schlieker may well salvage enough to rebuild his empire. But his tumble had so shaken the German public, to whom Willy Schlieker was the prototype of the self-made tycoon, that the West German Economics Ministry felt obliged to rush out a statement that Schlieker's problems were of his own making and "cannot be traced to a depression-type development in the German economy."

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