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WORLD BUSINESS

Painful changes for once-rich Ruhr

By CNN's Charles Hodson

Charles Hodson is traveling around Germany by train to test the mood of business people, trade unionists and ordinary voters ahead of Sunday's election.

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Miners in the Ruhr have staged protests to protect their jobs.

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HERNE, Germany (CNN) -- I'm heading into the Ruhr, Germany's traditional coal and steel heartland.

The region was the source of Germany's wealth -- and a stronghold of Chancellor Gerhard Schroeder's governing Social Democrats.

But last May, voters here tossed them out of the regional government, ultimately forcing Sunday's early election.

What made Germany rich were the dense seams of high-quality coal lying more than a thousand meters below the Ruhr region.

A visit to the 100-year-old Lohberg mine at Dinslaken is a snapshot of Germany's industrial history.

For generations, the coal powered the blast furnaces, producing the steel that German engineers turned into ships, cars, planes, weapons, factory machines ... you name it.

But this mine is on death row. At the end of this year Lohberg is to close. More than 2,000 people will either lose their jobs or be transferred to other mines.

The problem is not a lack of coal, but its cost. It's just too expensive to extract it.

In the canteen I meet Holger Grosch and Klaus Donath, miners and proud of it.

"The most important thing is holding on to the jobs we've got in Germany, and not just -- as the Christian Democrats and Liberals promise -- creating new ones," says Grosch. "The Social Democrats stand by us miners and keep their promises to us."

But what of the government's efforts at labor market reform?

"Look, the reforms the SPD has introduced, anyone can see they're not going to work in just one or two years," says Donath.

"You can't take something that's been run into the ground by the previous government for 16 years and get it up and running again in just four years! I tell you, any worker who doesn't go out and vote on the 18th, well I'm sorry to say this, but they don't deserve a job."

So as traditional industries decline, where will the new jobs come from? Germany's small- and medium-sized businesses are widely seen as the way forward.

I'm off to Herne to revisit Jeising Magnets. I first met the jovial Bernhard Jeising nine years ago. He's since made his son Mike joint CEO, doubled the workforce and sold three times as many magnets for electric motors.

"We still manufacture a little bit here, but we've outsourced the bulk of our production to China," says Bernhard Jeising.

"We actually get on OK with the present government because of our interest in China and Chancellor Schroeder is well regarded over there, and that helps us a lot."

Adds Mike Jeising: "The big thing is, though, that the Red-Green coalition is rather divided, they don't speak with one voice and somewhere along the way you've got to have a clear common line."

So where do the Jeisings, as employers, think the jobs will come from here?

"Well the heavy industrial jobs have gone, and I'd say that these days you'd only have a chance if you're a skilled worker or you've got an occupational qualification," says Bernhard Jeising. "The unskilled jobs have moved to Eastern Europe."

It's not a pretty picture. I still see an impressively industrial landscape, but the days of mass employment are over.

That's a painful realization for many, and some are in denial. And no matter who wins on Sunday, there's probably more pain to come.

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