The Late Aristocracy

The family business is the last legitimate form of feudalism. What once grew organically — the blacksmith Anton Reifenhäuser, who founded a workshop in Troisdorf in 1911, whose sons Hans and Fritz took over the craft in 1938 and shaped it into a global corporation for extrusion systems — is today defended as a model, as if success were hereditary.

But here lies the fallacy: Reifenhäuser works not because it is a family business, but despite it. The sons happened to be competent. The grandchildren too. For three generations. That's not a rule. That's luck.

The model presupposes what it cannot guarantee: that talent is inherited like shares.

I. The Historical Parallel

The aristocracy legitimized itself through divine right and bloodline. The nobility ruled because they were born noble. Not because they could rule. For centuries this system worked — as long as the environment remained stable. As long as wars were fought with swords and the economy consisted of agriculture, it was enough if the son did what the father had done.

Then came industrialization. Then came Napoleon. Then came the end.

The family business legitimizes itself through "tradition" and DNA. The grandson takes over because he is the grandson. Not because he can take over. For decades this system worked — as long as markets remained stable. As long as machines were built for combustion engines and customers came from the German auto industry, it was enough if the son did what the father had done.

Then came electromobility. Then came China. Then came the end.

II. The Fallen Houses

In the Black Forest, in St. Georgen, Johann Georg Weisser founded a machine factory in 1856. 170 years of family tradition. Lathes for the watch industry, later for the automotive industry. A "hidden champion," as they say in Germany — with the usual pride in being hidden.

In 2021, the family sold. It could or would no longer continue. Hardinge, an American corporation, took over Weisser. "Synergies" were promised, "accelerated growth." Three years later, in summer 2024, Hardinge itself filed for Chapter 11 bankruptcy. Weisser was swept along. September 2024: insolvency in self-administration, investor search. Finally, in July 2026, a management buy-out by four long-serving managers — with around 156 of formerly some 280 jobs.

170 years of tradition. Three years after the sale to the US, insolvency.

In Nürtingen, on the edge of the Swabian Alps, Hermann Heller founded a tool factory in 1894. 130 years of family tradition. Four generations. Milling machines, machining centers, machines for crankshafts and camshafts — the heart of the combustion engine.

In 2020, revenue collapsed by 40 percent. Corona, said some. Transformation, said others. The truth: Heller had bet on the combustion engine too long. 2021: 250 jobs cut. 2025: around 240 more jobs on the line. In February 2025, US investor H.I.G. Capital agreed to take over the majority. In August 2025, Heller was sold to DN Solutions from South Korea.

The Stuttgarter Zeitung wrote: "This ends the history of independence of Gebrüder Heller Maschinenfabrik, which had been run as a family business for four generations."

One from the Black Forest, one Swabian traditional company. Together 300 years of family tradition. Weisser sold to Americans in 2021, insolvent in 2024, taken over in 2026 by its own managers with just over half the workforce. Heller sold to Koreans in 2025. Not because they were bad. But because the family model has no answer to disruption.

III. The Empirical Present

Studies of Germany's 100 largest family businesses — such as the one by the AllBright Foundation — paint a sobering picture. Put bluntly:

Lack of diversity — The executive floors are homogeneous to the point of uniformity. Same origin, same education, same way of thinking. A closed caste.

Missing international experience — The world is viewed from Nürtingen. From St. Georgen. From Troisdorf. The provincialism of the old nobility, who considered Paris the center of the world.

Too few impulses from outside — External managers are seen as a threat, not an opportunity. The outsider is the intruder. Corporate culture becomes family religion. Innovation dies of piety.

The narrative goes: "We think in generations, not in quarters." But who guarantees that the next generation can think?

IV. The Mechanics of Failure

The patriarch cannot let go. He built the company, or his father built it, or his grandfather. It is his life's work. It is his identity. The thought that a stranger could run it better is unbearable.

The heir wants to "preserve," not risk. He didn't build the company. He inherited it. His mandate is continuity, not innovation. He administers an inheritance instead of running a company.

And when the crisis comes — when the market turns, when technology changes, when the old certainties no longer apply — then the ability to adapt is missing. Then "tradition" becomes an excuse for stagnation. Then "family culture" becomes an obstacle to change.

In the end comes the sale. To an American financial investor. To a Korean conglomerate. To anyone who has money and no sentimentality.

V. Others Pay the Bill

The owning family sells. They get money. Sometimes a lot of money. They can retire, retreat to the holding company, diversify their wealth. The name might remain on the company gate — as folklore, as a marketing instrument.

The new owners optimize. They "leverage synergies," as investor-speak puts it. They "streamline structures." They relocate production. They close locations.

The employees lose their jobs. Around 240 at Heller. 400 at Weisser at its peak. People who were loyal for decades. Who "thought along," as the Sunday speeches say. Who were part of the "corporate family" — until they weren't.

The region loses substance. Tax revenue. Purchasing power. Know-how. Young engineers move away. Suppliers look for new customers. The ecosystem that grew over a century crumbles in years.

This is the arithmetic of the family business when it fails: The family leaves with money. The investors leave with returns. The employees leave with nothing.

VI. The Model and Its Limits

The family business is not inherently bad. It can offer stability, long-term thinking, responsibility for region and employees. Reifenhäuser shows it can work — across generations, through crises.

But it is one model among many. Not the only one. Not the best. Not the only legitimate one.

The problem is not the family business. The problem is the ideology of the family business. The notion that blood is thicker than competence. That tradition is more important than adaptation. That the inheritance must be preserved — even if it destroys the company.

A model based on the chance of inheritance cannot be systematically successful. It can be lucky — like Reifenhäuser. It can fail — like Weisser and Heller. But it has no method to ensure competence.

VII. The Path into Folklore

The nobility has survived. As folklore, as gossip column, as castle hotel. The Habsburgs still exist. The Hohenzollerns too. They open charity galas and sell wine from their vineyards. But they no longer rule.

The family business will go the same way. Not all. Not immediately. But the model as such is outdated. The world has become too fast for structures based on inheritance. Markets are too global for leadership that thinks from Troisdorf. Technology is too disruptive for cultures that put "preserving" above "renewing."

The question is not whether the family business disappears as the dominant model. The question is how much of the economy it takes with it on its way into folklore.

The employees of Weisser and Heller would have deserved someone asking the question earlier: Is this company well-managed — or just traditionally managed? Is the heir competent — or just legitimate?

Asking these questions is not betrayal of tradition. It is responsibility toward the people who work in these companies. Who built their lives on them. Who deserve more than a place in the transfer company while the owning family rescues its wealth into the holding.

The founders Anton Reifenhäuser, Hermann Heller, and Johann Georg Weisser would have understood. They still knew that a business must function — not just persist. That competence counts — not just blood. That the workshop serves customers — not the name above the door.

Some heirs have forgotten.