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Economic crisis? This German company is growing due to Corona

2020-05-08T09:09:32.165Z

German industry has experienced a historic decline in production, with the heart of the automotive industry experiencing an unusual loss of profit. But there are also companies that benefit from the corona crisis.



German industry has experienced a historic decline in production, with the heart of the automotive industry experiencing an unusual loss of profit. But there are also companies that benefit from the corona crisis.

  • Because of the corona virus , many companies in Germany need financial support .
  • Small companies, self-employed as well as huge corporations are affected.
  • The auto industry is considered to be Germany's key industry. Can government aid * be justified?
  • Previous economic news on the effects of lung disease Covid-19 *. These new corona rules should apply - an overview *.
  • Update of May 8, 11 a.m .:  At the beginning of the corona crisis, German exports slumped as never before since 1990. In March, companies exported goods worth EUR 108.9 billion. According to the Federal Statistical Office, this was 7.9 percent less than in the same month last year and 11.8 percent less than in February 2020. Before the coronavirus paralyzed Europe, the companies had exported slightly more goods than in the same period last year.

    The buying mood in Germany is unlikely to make up for that. For the study "Covid-19 Consumer Pulse", the market research institute GfK interviewed Germans about their consumption plans. As a result, a quarter of those surveyed want to forego the vacation they are actually planning, and seven percent want to postpone the purchase of clothing, cars and luxury goods. A third said they would spend less money on the purchase of durable products such as furniture, cars or televisions in the future.

    GfK's consumption experts assume that consumers will shop more consciously in the future. "The new" normal "will be characterized by a difficult economic environment and tighter consumer budgets," says GfK expert Petra Süptitz.

    Zalando in the Corona crisis: shopping mood apparently unbroken

    Update from May 7, 6:12 p.m .: The online fashion retailer Zalando has apparently benefited from the Corona restrictions. "More and more people are shopping online. Platforms like Zalando are benefiting from this," co-founder David Schneider told Handelsblatt . The company had nearly 32 million active customers in the first quarter, 17 percent more than in the same period last year.

    Zalando with sales growth - because people were not allowed to go to the shops

    In some countries, including Italy , which was hit particularly hard by the pandemic , Zalando "smoothly doubled the number of users," said co-boss Robert Gentz ​​of the newspaper. The company management therefore plans neither layoffs nor nationwide short-time work and sees itself economically prepared for a second wave of infections.

    However, the quarterly figures of the online platform * speak a less clear language . On the one hand, Zalando increased its sales by 10.6 percent to 1.5 billion euros. On the other hand, the net loss from January to March was 86.4 million euros - in the same quarter of the previous year the company had lost 17.6 million euros.

    In the wake of the pandemic, the decline in demand and "special depreciation on inventory" for the current season burdened the operating result with 40 million euros, as Zalando announced. Nevertheless, the company expects bottom line growth in sales of between ten and 20 percent.

    Corona crisis: German industry is experiencing a historic slump

    Update from May 7th, 10:22 pm: Due to the Corona crisis, German industry is expecting  a historic slump in production. The Federal Statistical Office reported a 9.2 percent decline in industrial production in March . The Federal Ministry of Economics has also warned of an "even sharper production slump" for April. 

    A decline in industrial production by 9.2 percent compared to the previous month, the biggest drop since the survey statistics in 1991. Particularly from the effects of corona crisis is concerned, therefore, the car Industri e (minus 31.1 percent). The production of printed matter (minus 12.5 percent), pharmaceutical products (minus 11.8 percent) and the clothing industry (minus 11.5 percent) also suffered a sharp decline in production. 

    According to the Federal Ministry of Economics, production in the manufacturing sector was cut by 1.2 percent in the entire first quarter from January to March . "Given the good start to 2020, the decline in production triggered by the global corona crisis is still moderate in the first quarter." The shutdown only affected the second half of March - the Ministry is therefore expecting significantly worse values ​​for April.

    Corona crisis: Merkel rejects criticism from business associations - one follows up directly

    Update of May 6, 10:38 p.m .: Chancellor Angela Merkel rejected criticism from business associations about tentative steps in ramping up the economy on Wednesday . After consulting with the heads of state in Berlin, she said that large parts of the economy had not been banned. Compared to other countries, Germany went a "courageous path" and did not shut down "half the production".

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    The auto industry has been particularly hard hit by the corona crisis.  

    © dpa / Marijan Murat

    Regarding Tuesday's deliberations on the difficult situation for the automotive industry, the Chancellor said that buying behavior had changed. Business associations had previously voiced criticism of the course of politics and called for a clear road map for opening steps . Because orders and sales have broken down in many industries. However, Merkel made it clear that openings are particularly critical in the catering industry. An ARD commentator jumps to the side of the chancellor and pleads for a massive rethink in society after Corona.

    Corona crisis: BDI President criticizes Merkel for uncoordinated approach to easing

    When hotels are opened, there will also be more travel, which should be observed very well. According to the decision, the federal states should decide on a gradual opening of the gastronomy - against the background of the respective infection and country-specific peculiarities. Common hygiene and distance concepts of the respective ministerial conferences should provide the basis for this. 

    However, despite the far-reaching openings, the Federal Association of German Industry (BDI) has criticized the government's actions . The accusation: lack of coordination in relaxing the corona restrictions. BDI President Dieter Kempf said on Wednesday that the increasing relaxation of social life is important for companies and their workforces. " What is missing is a coordinated exit plan from the shutdown in this phase of greatest uncertainty." The simultaneous functioning of nationwide international logistics and mobility chains is essential for the successful ramp-up of industrial production, emphasized Kempf. "At the same time, it is important to show a great deal of trust in acting independently in industrial companies." 

    The BDI president also warned that every renewed shutdown would have unforeseeable consequences for the companies concerned. For this reason, the federal and state governments should clarify fundamental questions in a uniform manner so as not to overwhelm citizens and business. "This unity would be an important signal for successful crisis management." With the economic stimulus package announced by the federal government , Kempf called for more speed

    Corona crisis: Federal government plans to present an economic stimulus package in early June

    Update from May 6, 5:13 pm: At the beginning of June , the federal government plans to present an economic stimulus program . This was announced by Chancellor Angela Merkel on Wednesday after consulting the Prime Ministers of the federal states in Berlin. The program should be agreed in the week after Pentecost. "We will need an economic stimulus package," said Merkel. 

    When asked whether the government would have to bring forward the stimulus package due to further easing of the corona restrictions, Merkel said that there was a "firm" plan to agree on the program in early June. In terms of timing, this is very ambitious . You have to look at which areas would not have a chance to get back all the way due to the large number of visitors. 

    Federal Finance Minister Olaf Scholz (SPD) had previously announced that the federal government would submit an economic stimulus package by the end of May or early June. According to forecasts by the federal government and leading economists, Germany is plunging into a severe recession as a result of the Corona crisis . The government plans to boost the economy again with the planned economic stimulus program. 

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    Because of the Corona crisis: Temporary tax breaks for restaurants and cafes

    Update of May 6th, 11:39 am:  Restaurants and cafés should temporarily pay less taxes due to the Corona crisis . The federal cabinet decided on Wednesday in Berlin that the value added tax on food will be reduced from 19 to 7 percent for one year. "We give restaurants and restaurants a major boost when they open again," said Sarah Ryglewski, Parliamentary Secretary of State for Finance. The Bundestag and Bundesrat still have to approve the aid.

    Specifically, the regulation should apply for one year from July 1. It only affects food, not drinks. At the same time, the cabinet decided that grants from the employer for short-time work benefits are largely exempt from tax. The Ministry of Finance assumes that the measures will generate around 2.7 billion euros less tax this year and next.

    BMW also expects losses in the Corona crisis and plans to cut jobs.

    Wild debate before Merkel's car summit: Bavaria wants purchase bonus up to 4,000 euros - BMW cuts jobs

    Update from May 5, 9:34 p.m .: The carmaker  BMW has lowered its outlook in its core business due to the coronavirus pandemic and wants to reduce the number of employees. The goals should be achieved with a number of employees that will be slightly below the level of the previous year, said the Dax group on Tuesday evening. The company will use vacancies through fluctuation to drive personnel restructuring. BMW initially did not disclose the number of jobs that could fall victim to the tightened austerity measures.

    At the end of 2019, according to the old count, the group had almost 134,000 employees, based on a new definition around 126,000. Until now, CEO Oliver Zipse had planned to maintain the current year with an essentially constant number of employees.

    Wild debate before Merkel's car summit: Bavaria wants purchase bonus up to 4,000 euros - Even FDP warns

    Update of May 5, 3:45 p.m .: The conference call of the automotive industry with Angela Merkel (CSU) and other government representatives ended without a specific decision on purchase bonuses: a working group is to present results by June.

    Update from May 4, 3:00 p.m .: Are there purchase bonuses for cars again in the Corona crisis ? Shortly before Angela Merkel's car summit , the debate is already boiling high. However, the majority of reminders seem to be. Even the FDP warned of this type of economic aid on Monday.

    Criticism before car summit: New edition of the scrappage bonus could be a mistake

    Purchase premiums are "not only economically sensible, but also ecologically senseless," said FDP parliamentary group leader Frank Sitta on Monday to the AFP news agency . The federal government should "be careful not to commit the past mistakes again with a new edition of the scrappage bonus ". These only led to a "take-away effect" in which every taxpayer ultimately subsidized the car buyer who could afford a new car anyway.

    Other demands came from the states of the large corporations VW and Audi. Lower Saxony's Prime Minister Stephan Weil (SPD) wants a purchase premium - if it makes environmentally friendly cars more attractive. Ecological issues should play a "much bigger role" than the scrapping bonus in 2009, he said. However, the car market urgently needs to be boosted. Bavaria's Vice Prime Minister Hubert Aiwanger (free voters) demanded a purchase premium for cars from pollutant class 6 in the Augsburger Allgemeine .

    Corona and the economy: Before Merkel's auto summit - Federal Environment Agency warns of mistakes that will "take revenge"

    The President of the Federal Environment Agency , Dirk Messner, spoke out against a purchase premium for new cars. Instead, the government should create the necessary infrastructure and incentives for more electric mobility. "If we just take care of the here and now and forget the much bigger climate crisis, it will take revenge," he warned. However, if the funds are used correctly, it will become “the largest economic stimulus program since the beginning of the industrial revolution ”.

    The Left Party has apparently already devised a strategy. By 2025, German city ​​centers should become car-free , and from 2030 new cars with combustion engines should no longer be registered, according to a report by the Stuttgart newspaper and the Stuttgarter Nachrichten in a strategy paper by party leader Bernd Riexinger. 

    In order to achieve the radical restructuring without social upheaval and mass layoffs , Riexinger proposes "a combination of public participation and employee ownership" for the automotive industry. Priority must then "have the production of vehicles for collective mobility concepts", in addition to electric cars, electric buses and minibuses.

    The independent MP Marco Bülow (formerly) SPD brought up a completely different approach: he called for a " climate-friendly mobility premium for all people ". This could, for example, promote the purchase of bicycles or annual train tickets. In the crisis, "the big lobbyists should not get their hands on the reins," he warned.

    Corona crisis: Altmaier consultant opens lockdown calculation - "costs 60 euros every day"

    Update from May 4, 11:50 a.m .:  Jens Südekum advises Federal Minister of Economics Peter Altmaier (CDU)  and teaches international economics at the Heinrich Heine University in Düsseldorf - and has now calculated how much the shutdown * costs each individual German per day . “A week of lockdown * costs about $ 35 billion a week. That's 5 billion a day - and an average of 60 euros per German citizen per day, ”said the 44-year-old to the picture editorial team.

    The Altmaier consultant Südekum also assumes that the economic consequences * of the Corona crisis are underestimated: “The first forecasts that were made were too optimistic. It will go down dramatically. It is already clear that we will get the strongest review since the end of World War II, ”the report quotes.

    The FDP has meanwhile criticized Altmaier's plans to tighten controls on foreign investments. The economic policy spokesman for the FDP parliamentary group, Reinhard Houben , told the dpa that the federal government is restricting the rights of company owners and investors to “just suspicion”. 

    Corona crisis: Before Auto Summit - Volkswagen and Co. charge purchase premium for all new cars

    First report from May 3rd:

    Berlin - Before the top talk with Chancellor Angela Merkel (CDU) on Tuesday, the auto industry demanded a quick decision on purchase premiums for new cars. The president of the industry association VDA, Hildegard Müller, demanded quick clarity about the premium - otherwise the lull in the industry would be aggravated because consumers would further delay their purchase decision. VW boss Herbert Diess asked for purchase premiums for all new vehicles , not just for environmentally friendly e-cars . Opposition came from SPD leader Norbert Walter-Borjans and the Greens.

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    Minister of Economic Affairs Peter Altmaier (CDU) plans to amend the foreign trade regulation.

    © dpa / Tobias Schwarz

    Before the auto summit on Tuesday: industry is pushing for a stimulus package

    VDA President Müller urged a decision in WamS in May or early June. Müller complained of a current "double reluctance" of potential car buyers: They were not only unsettled because of the Corona crisis , but also because of the uncertainty whether they should wait for a government purchase premium . "Political decisions have to be taken promptly so that there is clarity in the market," said Müller. However, she does not assume that at the auto summit on Tuesday there will already be talk of specific amounts in euros. Then, according to a government spokeswoman, Chancellor Merkel wants to speak to representatives of the automotive industry about the "effects of the corona pandemic * on the production and sales of the industry".

    Lobbyist Müller emphasized that her association wanted " broad support " not only for electric and hybrid cars, but also for vehicles with internal combustion engines. "But we could imagine a tiered model in which certain drives receive additional bonuses."

    As is to be expected, the online interview creates violent headwinds. Many users defend themselves against multi-billion dollar support   for the automotive industry, including comedian Michael Mittermeier, who opposes another “scrappage bonus”:

    Dear Marion, I think there are as many people who need your car as there are people who need your bike. We in the country, for example. Nevertheless, I think the scrapping practice is a mistake. Because it reinforces that. We lose time in the environment, climate and technology

    - Marcus Mittermeier (@MMittermeier) May 3, 2020

    First # put the purchase premium into play #Vda and then customers are unsettled because there is no political decision.
    To ensure security, I would refuse a purchase premium for cars. Other industries have been hit much harder.

    - Ralph Rohfleisch (@RRrohfleisch) May 3, 2020

    VW chief Diess also urged a decision "in the next few weeks" in the Frankfurter Allgemeine Sonntagszeitung . Now is not the time for "fundamental discussions"; Rather, a "focus on the economy and pace" is necessary. The premium is not specifically about the car industry, but about the economy as a whole. This emphasized that the premium should not only apply to electric cars: "We need the premium regardless of the type of drive , for the entire product range."

    The demands of the car industry are causing criticism in politics

    The demands of the automotive industry met with skepticism in politics. SPD leader Norbert Walter-Borjans declined new purchase premiums for new cars with reference to "the rich profits of recent years" in the auto industry. "To consider taxpayers as guarantors for the dividends of shareholders is absurd," said Walter-Borjans to Business Insider .

    Green leader Robert Habeck demanded that a purchase bonus should only be given for ecologically exemplary vehicles . In addition, bonuses and dividends from the companies in question would have to be withheld in the event of government funding, he said on Deutschlandfunk.

    Habeck was generally skeptical about the need for help in the automotive industry . "On the one hand, the automotive industry brags about how well it is doing, what profits it has made," he said. "On the other hand, she wants taxpayers' money to save her companies. That doesn't go together."

    Loosening of the corona requirements: pressure also from the catering trade

    Chancellor Merkel wants to advise the car industry on Tuesday, and on Wednesday Chancellor and Prime Ministers want to decide on further steps to relax corona requirements in public life. BDI boss Dieter Kempf warned of a noticeable opening: "Our companies want and need to know in which stages social and economic life should start again," he told the Funke newspapers.

    The hotel and restaurant association also put pressure. On Wednesday, "a clear roadmap for my industry and a rescue fund would have to be decided," CEO Ingrid Hartges told Bild am Sonntag . However, Merkel had already announced that easing in the catering industry should only be discussed at the next federal and state consultations.

    Coronavirus infections worldwide are worrying citizens. There is another pathogen that currently represents a far greater danger *.

    dpa / pf

    Everyone is currently looking at politics and science. Christian Drosten is disturbed by the fact that both parties do not always work hand in hand. The virologist is annoyed.

    * Merkur.de is an offer from the nationwide Ippen-Digital editors network

    Source: merkur

    All news articles on 2020-05-08

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