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By Michael Rothe
No, Lutz Leuthold is not rejoicing over the arrival of TSMC and other heavyweights in Dresden. Saxony's decision-makers have been outdoing themselves with superlatives ever since it was decided that the Taiwanese semiconductor manufacturer would be based there together with Bosch, Infineon and NXP Semiconductor plans to build a chip factory (ESMC) and create 2,000 jobs not far from the airport in 2027.
Oliver Schenk (CDU), Head of Saxony's State Chancellery, puts it in a nutshell: the investment strengthens "Europe's largest microelectronics cluster, Silicon Saxony, and provides Germany and the EU with greater technological independence from Asia and America as well as sovereignty in a key industry for the digital and green transformation".
Regional Development Minister Thomas Schmidt (CDU) is convinced that the project, which is worth five billion euros in taxpayer funding, "will also benefit smaller companies and craft businesses in the long term". He promises: "We want to support and promote the new large semiconductor industry settlements in the state capital and their effects." Dresden's Lord Mayor Dirk Hilbert (FDP) knows that many existing companies are also planning to expand or have already done so. He expects further "growth that is not even foreseeable today".
Dresden years behind schedule with land development
Lutz Leuthold would like to be part of this boom. The car mechanic and business economist had big plans: not a traditional garage, but an innovative service center for mobility with a variable work platform and maintenance of all types of cars, including last-mile vehicles for suppliers and delivery staff. But the 46-year-old feels thwarted. Ex officio. His accusation: when it comes to the promotion of major investments by the Free State, local small and medium-sized companies are being left behind. Yet they make up 95 percent of Saxony's economy.
The entrepreneur started out in 2001 with an independent workshop in Ottendorf-Okrilla. In 2003, he took over an insolvent car dealership in Dresden-Klotzsche and set it up again. But the labyrinthine address was not a solution for eternity. He learned that the state capital wanted to develop the "Am Rähnitzsteig" industrial estate at the airport and signaled interest in a 5,900 square metre building site. "The development should be completed in two or three years. But the site was only put out to tender in 2019, six years later than planned," says Leuthold.
This was followed by a back and forth of acceptances and rejections, changes to EU state aid rules, the reform of the Renewable Energy Sources Act, a new tender. And silence from the city. The entrepreneur rejected an alternative site offered because it was too small and there was no option to expand. In January 2020, he finally got the go-ahead for the site. "That was pure joy after almost ten years of struggle," he recalls. But then: corona and lockdown.
Interested corporations drive up land prices
Banks refused to lend to the automotive industry. Leuthold had to look for new financiers. In addition, the city announced a new soil survey because the price of the land would increase. The reason: tobacco giant Philip Morris and chip manufacturer Robert Bosch had bid far above the market price for the purchased land, thus driving up the standard land value. But the entrepreneur had no alternative and stuck with it.
But the process dragged on. In the fall, the city suddenly insisted that the purchase be completed by the end of 2021, otherwise he would lose the bid. "That's when I found out for the first time that the bid had a time limit," he asserts. Leuthold was given a deadline of February 2022. New hope: Sparkasse Meißen was open to the project and financing.
But then: Federal Economics Minister Robert Habeck (Greens) buried the funding for energy-efficient new builds - 690,000 euros that Leuthold had firmly budgeted for. The annoyed man asked the city for a six-month delay because he was forced to plan smaller. In vain, "although I had to wait six years for the city," he grumbles, who was constantly reminded that his livelihood was at stake.
The city only has an area of 18 soccer pitches available
On April 1, 2023, Leuthold closed his workshop, 20 years to the day after it started - and between the announcements of a second Infineon factory and the new ESMC building. "I understand that the city fathers don't want to miss out on such big fish," says the failed entrepreneur. But the focus is too much on one industry. His message is that decision-makers should be equally serious in their commitment to local SMEs. Carpenters and metalworkers cannot pay 200 euros per square meter, nor can they pay rents that a chip supplier would be willing to pay. City council circles say that Dresden plans its commercial space primarily for the semiconductor industry, its suppliers and service companies.
According to information from Saechsische.de, Dresden's nine municipal industrial estates were around 90 percent full in February, with a good 13 hectares of just under 113 still available - the area of around 18 soccer pitches. A tenth, but small area in the Reick district is currently being upgraded as a science location. According to the city's economic development agency, 17 commercial building plots ranging in size from 1,200 square meters to 2.5 hectares are available. The seven private business parks were similarly well occupied, with 40 hectares of 228 still available - the equivalent of around 56 soccer pitches. The hunt for the few available plots has long since begun.
The Dresden Chamber of Industry and Commerce (IHK) calls the issue "extremely precarious". New areas urgently need to be developed, demands Managing Director Lukas Rohleder. However, successful densification, ownership structures, competition from residential construction and the topographical location in the Elbe Valley make expansion difficult or even impossible. "In addition, supplier companies have already been notified that they will accompany the TSMC relocation and are signaling their need for space, ideally close to the client," says the head of the Chamber of Industry and Commerce. For Dresden, it is "immanently important" to work together with the surrounding area in order to develop a common economic area. Due to the thousands of new Dresden residents, this also applies to the availability of living space.
Crafts also need areas to grow
Nevertheless, Saxony's municipalities can once again apply to the Aufbaubank for funding for development and land use plans for the development of commercial and industrial areas from now until July 2, the State Chancellery announced on Wednesday. Four million euros would be available for this in 2024. At the top of the approval criteria: "state and federal political interest" and "future and key technologies".
"Craft businesses also need commercial space to implement their growth plans," claims Andreas Brzezinski, head of the Dresden Chamber of Crafts. "The aim should be to define the service level of large-scale settlements as a benchmark in order to achieve similar standards for skilled trades and SMEs."
This would come too late for Lutz Leuthold. He "certainly didn't do everything right, which is normal for such a major project, but the city's wrong decisions were crucial to my failure". This is coming from a man who put everything - "easily half a million euros" - on one card. Apart from a small parking space rental for mobile homes, he has nothing left, admits the ex-entrepreneur, who is now employed by a compressed air company.
Even a year after the closure, Lutz Leuthold can't let go. Meanwhile, the site he wanted to use to grow has been given to a service provider in the chip industry - at least a local one.
