Germany Fails in Effort To Keep Builder Afloat

FRANKFURT— The German construction company Philipp Holzmann AG filed for insolvency Tuesday after last-minute intervention by Chancellor Gerhard Schroeder failed to convince banks to support a 4.3 billion Deutsche mark bailout.

Mr. Schroeder, fearful that tens of thousands of jobs were at stake if the

nation's second-largest builder collapsed, promised not to give up his efforts to keep the company alive in some fashion.

The chancellor pledged to fly to Frankfurt on Wednesday to convene another emergency meeting of Holzmann's creditors, even after three previous gatherings of bankers ended without result.

The frantic effort reflected a broader fight to save Germany's revered system of consensus among industry, banks, unions and government. Many Germans, who credit the system for the country's postwar economic rebirth, see the failure of banks to support Holzmann as a breakdown of what has come to be known as "Rheinland" capitalism.

"The end of an era," the newsweekly Der Spiegel commented this week, lamenting a new epoch in which shareholders and global markets, not unions or politicians, determine the fate of jobs and companies.

Mr. Schroeder also sounded unwilling to go easily into this new and harsher era.

"I am just not ready to accept that a company that is still a going concern should go bust because of a mistake made by its management," Mr. Schroeder told reporters. "It is the government's role to ensure that does not happen."