Baden-Württember, southern Germany’s wealthy state where family businesses ward off economic crisis

An unending line of loaded-down trucks fills the streets and highways of the German state of Baden-Württemberg, located next to Bavaria and the borders of Switzerland and France. Driving through the southern German region, one sees a series of towns perched amid the countryside, next to forests and farmlands, many with factories on their outskirts, including global market leaders in their sectors. Small and medium-sized enterprises (SMEs), the country’s economic and labor engine, dominate the area’s landscape and have helped keep its local population from having to seek their livelihood in the big cities. The national debate surrounding the best path to growth after two years of economic recession, one of the major issues in the German campaign season that culminates in Sunday’s elections, is seen differently here, perhaps a bit more optimistically.

In Germany, there are more than 1,300 companies referred to as “hidden champions” in their market sector, largely led by families for generations. In total, 832 cities are home to at least one global market leader, and when it comes to states, Baden-Württemberg (population 11.1 million) is at the top of the list, followed by North Rhine-Westphalia, Bavaria and Hessen.

The city of Crailsheim in Baden-Württemberg, a town that is governed by an alliance between The Greens with the Christian Democratic Union (CDU), provides a tidy example of this kind of economic strength. The nearly 59,000-strong community, located between Stuttgart and Nuremberg, is an important commercial hub. Fourteen of the most important German companies are located here, as well as three of the country’s 1,476 global market leaders.

Groninger, a family business founded in 1980 that had close to $303 million in sales in 2023, is one of these stand-out firms. “We’re doing relatively well, because the pharmaceutical market and cosmetics market continue to grow, so we have very good orders,” says Jens Groninger, the company’s CEO and son of its founder.

Speaking from his office at the company’s Crailsheim headquarters, he shares that Groninger isn’t accepting new orders until mid-2026. “Despite the crisis, demand is still high. That’s also due to the fact that we build special machines designed to meet customer needs,” he says of the equipment the firm sells to big pharmaceutical companies like Pfizer. “If you have ever had a vaccine or been injected with [the blood thinner] Heparin, there is a good chance the syringe was filled by one of our machines,” says the CEO, whose company is a global market leader in the disposable syringes sector.

The key to Groninger’s success, like that of many other of the area’s companies, is consistently filling a niche with a business that gradually grows throughout the years. “We grow constantly, not excessively, but a little every year. I think it’s also characteristic of family businesses. We have to make a profit, but we are not looking to maximize it. Nor are we a shareholder-managed company, which has to answer for the value of its shares,” he says.

Groninger employs more than 1,600 individuals, and has no plans to reduce its workforce. To the contrary, it is growing and investing in Crailsheim and the neighboring towns of Schnelldorf and Charlotte, North Carolina, the location of one of its facilities where it plans to grow production to counter possible tariffs.

That makes its workers rest easy. “They’re not worried, because they know that we are in a market that will continue to grow,” says Groninger. Still, he recognizes that Germany has a serious problem when it comes to business, at a moment during which all signs point to a third consecutive year of recession in the country. According to Groninger, the next government will have to face the considerable challenge of reducing bureaucracy, which he calls a “disaster,” and taking better care of the mid-sized businesses that “are the ones holding up the economy in Germany” to keep them from moving to other countries.

Beyond being a good place to do business, the city shows up in history books due to the battle that took place here in mid-April 1945, when the Nazi forces drove the Americans out of the municipality after a four-day occupation. The Allies returned a few days later and destroyed 95% of Crailsheim’s historic downtown and 80% of the entire city. Less than three weeks later, the Nazis were defeated on May 9, 1945.

Crailsheim was rebuilt in a similar style as many other cities in western Germany that were destroyed during World War II. It features a pedestrian thoroughfare with — primarily German — businesses that alternate with well-maintained three-story houses.

Rainer Brehm has worked in Crailsheim his entire life, and has little concerns about its economy. Despite the German recession, he has no fear of losing his job at transportation company DB Schenker, though he does acknowledge that the automobile industry has felt the impact of the crisis. The 47-year-old German, who is the father of two daughters and a son, does worry that the next government — which according to polls, will continue to be led by conservatives — won’t be capable of solving, for example, the issues facing car companies. “The war in Ukraine also concerns me, but that’s very far away,” he says.

Meanwhile, when it comes to issues closer to home like the debate over immigration that has dominated the election season after recent attacks committed by asylum seekers, he believes that “many of them [immigrants] are very integrated, and the way that [far-right political party] Alternative for Germany is using the issue is very unfair.” His wife Martina says it’s “complicated.” “On one hand, they’re not given the papers they need to work, and on the other, we need immigrants in our labor market,” she says.

Crailsheim, which is home to 8,046 foreigners, according to data from the Baden-Württemberg statistical office, has paid witness to the recent local rise of Alternative for Germany. Martina, who works in the city hospital, admits that it has her worried. “It’s not that I’m happy with the current government, but I am definitely afraid of what’s coming. I’m afraid of those who vote for the AfD.”

One of the things that concerns Yann Gelbing, a 33-year-old who studied in Crailsheim and works in the region, is retirement. “In my generation, many of us are asking what the future holds. We’ve got to look for solutions for those who will retire in 30 years, not just those who are retiring now,” he says.

Gelbing, who currently lives in the neighboring town of Schwäbisch Hall with his girlfriend, is less worried about the economic crisis. “Overall, we’re doing well. There are always economic waves. I’m not worried and neither is my circle of friends,” he says. Still, he recognizes that there are problems to solve and indicates that aid sent to Ukraine will likely need to be examined. “I’m not saying we shouldn’t support them, but we have to re-evaluate everything,” he says. In regards to the issue of immigration, he admits that his peers are growing more concerned: “Politicians are not doing everything they should on this issue.”

The company he works for, BTI, has its headquarters in Ingelfingen — a city with a population just shy of 5,500 — and is one of the leading firms in direct sales to the construction sector, with nearly one thousand employees. “Although the next two years are not expected to go very well, due to the industry, we are still looking for new people and investing,” he says, arguing that this is one of the advantages of working for a family business. “If they go through a bad patch, they don’t toss people out immediately on the street, but try to stick it out as long as possible.”

Curiously, just a couple miles away from Ingelfingen and less than 25 miles from Crailsheim stands Künzelsau, a city of 16,000 inhabitants that is home to Würth Group, a global market leader in the manufacturing of assembly and fastening materials. More than 8,000 people work in this location alone. But driving down the backroads that lead to Künzelsau, you’d never guess that it was the headquarters of a company whose sales rose to over $22 million in 2024, with more than 2,800 locations in 80 countries. A visitor might also be taken unaware by an enormous, 107,000-square-foot building that rises up amid meadows and forests; the Würth Museum 2, which was designed by the studio of architect David Chipperfield and houses an important art collection year-round. Should you find yourself in the region, you might even forget for a moment about the problems that have been roiling Germany’s election season over the past few weeks.

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