The Limited Times

Now you can see non-English news...

Energy crisis: Gas and electricity prices weigh on medium

2022-09-10T12:19:31.066Z


A baker does not know what roll prices he can still demand. A metalworker is considering moving production abroad due to rising energy prices. How long will this be good?


AreaRead the video transcript expand here

In the German metal industry, the furnaces are running at full speed – for now.

Because the energy crisis is causing uncertainty among industrial companies.

Also at the Bögra company in Solingen.

The company manufactures metal components for automobiles and commercial vehicles - and uses more than five million kilowatt hours of electricity every year.

Tobias Linser, Bögra Technologie GmbH:

“In addition, there are over 500,000 kilowatt hours of gas that we use here in the foundry.

Compared to today, energy costs would increase or increase five to six times for us from October.

And that's where we have the problem of simply passing on these costs one-to-one to our customers.

That is not communicable.«

In order to save energy and thus money, the company wants to convert its production and increasingly rely on short-time work.

If these cost-cutting measures are not enough, the company considers relocating production abroad.

Tobias Linser, Bögra Technologie GmbH:

»At the moment we are already partially cooperating with an extended workbench in the Czech Republic and we also have strategic partnerships with an Indian company.

If we saw by the end of the year that there would not be a significant improvement or, in our opinion, that there would be an extremely necessary cap on energy prices, we would start to relocate production.«

Many companies cannot simply pass on the increasing costs of energy to their customers on a one-to-one basis.

This is not only true in the metal industry.

Bakeries are worried too.

Peter Hemmerle, Hemmerle Bakery:

“It will be very, very difficult for the bakery industry.

And, of course, there will be businesses that have had problems before because customers are moving more and more into the discount sector.

People keep their money together, understandably because everyone has a limited budget.

And then maybe at some point the good quality of the baker will no longer count, but the price will be decisive.

And that's why I'm worried."

Business and politics are already warning of a wave of bankruptcies.

Almost every tenth company has already reduced or even interrupted production, according to a recent study by the industry association BDI.

Almost every fourth company is considering or is already in the process of relocating part of its business abroad.

At the beginning of September, the government put together the third relief package since the beginning of the war in Eastern Europe.

Companies feel let down.

Tobias Linser, Bögra Technologie GmbH:

»For us, as a classic medium-sized company, basically nothing of this aid package reaches us.

To be honest, we don't feel seen or heard at this point, and we hope that there will be a cap on gas and energy prices, as is the case with our European neighbors.

Because only that can lead to equal treatment and also to planning security, which would motivate us as a medium-sized company to continue producing here at the location.«

Companies and associations are increasingly demanding support from politicians.

Federal Economics Minister Robert Habeck finally announced additional measures in the Bundestag on Thursday.

Robert Habeck, Federal Minister of Economics:

'Until we get the prices down - and it will certainly take a while before we get the prices down - we will give the companies every help we can.

We will open up a broad rescue parachute and we will open it up broadly, so that small and medium-sized companies in particular can fall under this rescue parachute."

The existing energy cost containment program for particularly affected sectors will therefore also be opened up to small and medium-sized companies.

But what the Economics Minister emphasized in the announcement is something that bakeries and metal companies in Germany also know: politicians will not be able to subsidize rising energy prices forever.

In order for companies to be able to breathe easy, prices must fall again – permanently.

Source: spiegel

All business articles on 2022-09-10

You may like

News/Politics 2024-02-23T11:14:33.847Z
News/Politics 2024-02-15T12:52:19.624Z

Trends 24h

Latest

© Communities 2019 - Privacy

The information on this site is from external sources that are not under our control.
The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.