Dramatic call for help from the skilled trades – “Many companies are up to their necks in water”

Created: 09/13/2022 10:23 am

By: Thomas Schmidtutz

Hans Peter Wollseifer: The President of the Central Association of German Crafts (ZDH) is pushing for rapid state aid for companies.

© Sven Hoppe/dpa

Rising energy prices are putting more and more handicraft businesses in need.

Without state help, there is a risk of bankruptcies, warns Chamber President Wollseifer.

Berlin - The President of the Central Association of German Crafts (ZDH), Hans Peter Wollseifer, is calling for rapid help from the state in view of galloping energy prices.

The situation has worsened dramatically, especially for energy-intensive companies such as bakers, he told the German Press Agency in Berlin.

"Many are now up to their necks in water," says Wollseifer.

"And these companies will go under if they are not quickly thrown a lifebelt of direct and unbureaucratic hardship aid."

Delayed measures were not enough, emphasized Wollseifer.

“In order to prevent a wave of bankruptcies in the trades, the support must come now.

And it must be easy for the affected companies to apply for it.” Just a few days ago, Economics Minister Robert Habeck caused a stir with statements about the risk of insolvency among bakers and other companies.

Craft suffers from higher costs and disrupted supply chains

In a current ZDH survey on the consequences of the Ukraine war, 87 percent complained about disrupted supply chains and increased procurement prices.

Existing orders would become uneconomical: 70 percent of the participants stated that they actually made losses with orders.

"Many companies simply lack the means to survive such a dry spell," warned Wollseifer.

The vast majority of companies (88 percent) reported increased costs for electricity and heat since the beginning of the year, by an average of 62 percent.

According to the survey, this is a problem particularly in the food and automotive trades.

Only very few were able to pass all of the cost increases on to their customers. 70 percent stated that they were at least partially able to do this, and 27 percent not at all.

This is due, among other things, to the lack of willingness on the part of customers to pay, the commitment to existing contracts and strong competition from competitors.

Chamber of Commerce President: Need more contracts with price opening clauses

Wollseifer called for greater use of so-called price escalation clauses in public contracts.

These make it possible to subsequently adjust prices for goods or services to reflect increased costs.

While the federal government requires the use of construction contracts as widely as possible, the use in the federal states and municipalities is still patchy, the ZDH determined.

According to the association, more flexibility is also needed with regard to completion deadlines.

Wollseifer made a similar statement last year.

It is correct that the federal government wants to open the energy cost containment program, which helps energy- and trade-intensive companies with grants, across all sectors to companies that are particularly affected, said the chamber president of the dpa.

"But now it is important that it does not stop at an announcement, but that this hardship case assistance is implemented quickly in such a way that affected companies can use it this year and next."

In addition, energy costs for small and medium-sized businesses need to be cushioned by means of an energy price brake and a reduction in energy taxes to the minimum tax rates permitted under European law.