As of: March 28, 2024, 7:57 p.m
By: Hannes Niemeyer
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Will the next German company leave? Reports emerged that chainsaw market leader Stihl is thinking about exiting the market. The company is now committed to Germany – for now.
Waiblingen-Neustadt – The German economy is in crisis. A finding that is not exactly new. But these days it received confirmation again. Only recently did the five most renowned economic research institutes correct their forecast for the year downwards. That certainly doesn't make the location any more attractive. The economy is slowing down, and many people also see the traffic light government's growth opportunities law as a drop in the ocean.
The effects are felt. A new study recently showed that Germany is becoming less attractive as a business location for companies. According to the location index of the auditing firm KPMG, the Federal Republic slipped into mediocrity. The business opportunities are there, but “all location factors will deteriorate,” according to the published report. And not only could fewer companies be attracted, established companies are also turning away.
Is Germany unattractive as a business location for companies? The Miele case is causing concern
The most prominent example of this from the recent past: the traditional company Miele. It was only announced in February that the household appliance manufacturer was cutting 2,000 jobs and wanted to relocate many of them out of Germany, for example to Poland. The news came in the group's 125th anniversary year. And even if the move was seen as predictable in the industry, it still raises concerns that other companies could follow suit.
Accordingly, a new report from
Focus Online
, which was circulated in the media, made people sit up and take notice. It said that the next traditional brand wanted to leave Germany. It was exactly about the chainsaw brand Stihl, after all the world market leader in its field and based in Waiblingen-Neustadt, Swabia. A company with decades of tradition in Germany, employing over 20,500 people worldwide. And this despite the fact that 90 percent of the sales of 5.5 billion euros from 2022 no longer come from Germany. Stihl continued to invest heavily with 400 million euros in 2022. But soon no longer in Germany?
Stihl is committed to Germany as a business location - but things could look different from 2030. © Franziska Kraufmann / dpa
Is chainsaw market leader Stihl about to leave Germany? The company is said to be flirting with Switzerland
According to the report, the company is thinking of relocating to Switzerland, of all places, its so expensive neighboring country. An idea that doesn't sound like cost savings at all. The reasons: Despite higher wages, production costs are cheaper. The demands for a reduction in weekly working hours while keeping wages the same, as Deutsche Bahn has now permitted in its agreement with the GDL, also raise concerns about an expansion. Advisory board chairman Nikolas Stihl has long made no secret of the fact that he considers Germany to be lagging behind as an economic factor; he emphasized this in an interview with
Handelsblatt
last year
.
So is Stihl about to leave Germany? It's probably not as drastic as it sounds here. At least not in the near future. The reports of a relocation are also based on the dismantling of the so-called “Stihl Werk 5”, a logistics location in Ludwigsburg that was operated until 2018. When asked by IPPEN.MEDIA, Stihl stated that the building structure “no longer met the requirements and general conditions”. Therefore, the activities there were “gradually relocated to Stihl Plant 2 in Waiblingen-Neustadt”. The rail production for the saws takes place there.
Stihl is examining possible location alternatives: relocating to Switzerland would have an advantage
New usage scenarios for the building were thought through, a concept study for a new production site on site in 2022 was also presented and dismantling began. At the same time, considerations are being made for the new development of a plant in Ludwigsburg's Weststadt. The company discovered “that the implementation of the existing preliminary planning would require an unexpectedly high investment sum,” primarily due to construction and energy costs.
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It was therefore decided to “resize the plans and examine possible alternatives,” the statement continues. Switzerland was also included in the considerations as a benchmark. An obvious choice, after all, the company's saw chains are produced there for the global market. “If the decision for this location is made, the entire cutting set for our chainsaws could be manufactured in Switzerland in the future,” the company continued in its response to our editorial team. A tempting prospect.
Just a game for time? Stihl is committed to Germany as a location – but only for the time being
So is sticking to Germany as a location just a game for time? Possibly. When asked by IPPEN.MEDIA, the company is committed to its home country, at least for the time being, saying that it is “firmly committed to Germany as a location”. A decision about a future location had not yet been made at the time of the statement on March 28, 2024. “Since the continued operation of the existing rail production in Plant 2 in Waiblingen-Neustadt is secured until at least 2030, a final decision will be made about the future production location at a later date,” Stihl confirms to our editorial team. There is therefore no pressure to make a decision.
At the same time, Stihl also makes it clear that the “Stihl Plant 5” area, which was previously intended as a location for new, more modern production, will initially be shut down, but will remain in the company's possession. Stihl remains loyal to Germany as a location. This is also confirmed by the IG Metall union, which told our editorial team that it knew nothing about a planned relocation to Switzerland. However, things could look completely different in just a few years.