The creeping deindustrialization of Germany and Europe
A lack of energy, sharply rising energy prices and CO2 pricing, overwhelming EU regulation and sprawling national bureaucracy are the main causes of the deindustrialization of Germany and Europe, which the Bergstrasse Academy documents:
“The causes are diverse, but can no longer simply be dismissed as 'normal structural change'. A lack of energy due to incorrect energy policies with an unjustified high level of trust in the weather-dependent ambient energies of wind and sun in the absence of large-scale storage, as well as sharply rising energy prices, including CO2 pricing, are the main causes. Other reasons are increasing supply chain and procurement problems, overwhelming EU regulation and sprawling national bureaucracy. In addition, there are wage cost developments as a result of the ultra-expansive, inflation-driving monetary policy of the ECB and the exploding consumer spending in the state budget, the high tax burden from an international perspective and the shortage of skilled workers that has been ignored for years. The conditions for industry and crafts, which often affect Germany as a location, cannot be justified in terms of climate policy. Because of the decreasing willingness of industry within Germany to invest and increasing production relocations to countries with fewer restrictions and requirements, greater environmental damage is accepted with approval.”
It is a growing list of industrial companies that the Academy has compiled under the keyword deindustrialization. And the youngest, most prominent example, the auto parts supplier Kostal, isn't there yet.
The car supplier Kostal
Kostal “wants to stop production at three locations. In the future, the company from the Märkisches Kreis will increasingly produce gear plates, steering column modules, seat adjustment switches and much more abroad. This is the only way to avert damage to the entire Kostal Group and ensure continued existence as an independent family company. But hundreds of employees are on the brink," writes Wirtschaftswoche. Kostal is considered an important supplier for the automotive industry in the transition to electromobility. The group has its headquarters in Lüdenscheid, in the western part of the Sauerland region, but apparently no longer feels competitive there.
As early as June 2022, the mayor of the city of Lüdenscheid spoke up: Kostal's decision not only had a direct impact on good local jobs, but possibly also on the production of other automotive suppliers in the region. With regard to the current development, Mayor Wagemeyer appealed to the higher political level of North Rhine-Westphalia and the federal government, to focus even more on Lüdenscheid and the South Westphalia region from now on. Whether this recommendation helps, one may strongly doubt.
The semiconductor supplier Hellma Materials is migrating to Sweden
Hellma Materials GmbH, world market leader in the production of important starting materials for the production of semiconductors, is no longer investing in Jena in eastern Germany, but in Sweden. The reason: "The stable and calculable energy supply is essential for our company and played a major role in the decision," says Thomas Töpfer, managing director and co-owner of the company. Instead of building in Jena, the group is now building in Sweden because electricity is much cheaper there.
Delkeskamp packaging plants close paper factory in Nortrup
The company will close a paper mill in Nortrup in Lower Saxony because of the high energy costs. The company is also reacting to delivery difficulties. This means that 70 employees of the family company will lose their jobs.
The company will close a paper mill in Nortrup in Lower Saxony because of the high energy costs. The company is also reacting to delivery difficulties. This means that 70 employees of the family company will lose their jobs.
Chemical company Evonik plans to replace natural gas with coal, butane and heating oil
In the new gas-fired power plant at the Marl site, the company would like to use liquefied petroleum gas (LPG, consisting primarily of butane gas) instead of natural gas to generate energy. In addition, Evonik will continue to operate a coal-fired power plant in Marl, which was actually supposed to be shut down in 2022. Evonik has to pass part of the increase in costs on to customers, which can affect international competitiveness.
In the new gas-fired power plant at the Marl site, the company would like to use liquefied petroleum gas (LPG, consisting primarily of butane gas) instead of natural gas to generate energy. In addition, Evonik will continue to operate a coal-fired power plant in Marl, which was actually supposed to be shut down in 2022. Evonik has to pass part of the increase in costs on to customers, which can affect international competitiveness.
Copper producer Aurubis AG wants to pass on increased electricity costs to customers
Europe's largest copper producer, Hamburg-based Aurubis AG, wants to minimize its gas consumption and pass on its increased electricity costs to customers. This was announced by CEO Roland Harings on August 5, 2022.
Head of the Otto Fuchs Group warns of creeping deindustrialization
The President of the Association of the Aluminum Industry, Hinrich Mählmann, sees no way for his company, the Otto Fuchs Group, to save gas without cutting production. "We cannot save 15 percent without reducing production," says Mählmann on August 1st of the ARD morning magazine . "That means we would be able to deliver less." The consequences would then affect the construction industry, the automotive industry or even medical technology. "If we don't find a solution to the energy crisis in a timely manner, there will soon be no more aluminum smelters in Germany." So the reasons are energy prices and a lack of energy.
Production stop at the Slovakian aluminum smelter Slovalco
There is a production stop at the Slovalco aluminum smelter in Slovakia. The reasons are energy costs and CO2 compensation costs. The production stop is therefore also a consequence of the strict CO2 reduction policy of the European Union.
There is a production stop at the Slovalco aluminum smelter in Slovakia. The reasons are energy costs and CO2 compensation costs. The production stop is therefore also a consequence of the strict CO2 reduction policy of the European Union.
Dutch zinc smelter stops production
On August 16, 2022, a zinc smelter in the Netherlands announced that it would stop production due to high energy costs. 429 jobs are affected.
On August 16, 2022, a zinc smelter in the Netherlands announced that it would stop production due to high energy costs. 429 jobs are affected.
Swiss Steel warns of electricity shortage economy
According to the steel company Swiss Steel International, a country like Germany, which cannot reliably supply its economy with energy, should not be surprised if it is viewed with skepticism. The mere thought of production interruptions has a deterrent effect, writes the Neue Zürcher Zeitung on August 13, 2022. Customers are increasingly avoiding manufacturers in regions where power interruptions and thus production interruptions are “also only seen as a possibility”.
According to the steel company Swiss Steel International, a country like Germany, which cannot reliably supply its economy with energy, should not be surprised if it is viewed with skepticism. The mere thought of production interruptions has a deterrent effect, writes the Neue Zürcher Zeitung on August 13, 2022. Customers are increasingly avoiding manufacturers in regions where power interruptions and thus production interruptions are “also only seen as a possibility”.
Metal refiner ROT Rickert Surface Technology had to shut down the nickel plant
Since March 2022, the electroless nickel basin has been out of service. "Unfortunately I can't offer that (metal components) at the moment," said company owner Sönke Rickert to the Norddeutscher Rundfunk (NDR). “The pool is heated to 90 degrees Celsius. Since the price of electricity has risen so enormously at the moment, it is not profitable for me to continue to operate this pool economically.”
Since March 2022, the electroless nickel basin has been out of service. "Unfortunately I can't offer that (metal components) at the moment," said company owner Sönke Rickert to the Norddeutscher Rundfunk (NDR). “The pool is heated to 90 degrees Celsius. Since the price of electricity has risen so enormously at the moment, it is not profitable for me to continue to operate this pool economically.”
DMV Deutsche Metallveredelung GmbH in Lennestadt is insolvent
Almost 100 employees lose their jobs. The energy-intensive company had recently suffered in particular from the immensely rising costs for electricity and gas.
Almost 100 employees lose their jobs. The energy-intensive company had recently suffered in particular from the immensely rising costs for electricity and gas.
The traditional tile manufacturer Villeroy & Boch
It closes its main plant in Mettlach, Saarland, at the end of the year and wants to relocate the entire production to Turkey: "Extremely high costs for energy, transport, packaging and raw materials as well as the high wage level in Germany make the production of tiles economically unattractive," says a spokeswoman for the company.
It closes its main plant in Mettlach, Saarland, at the end of the year and wants to relocate the entire production to Turkey: "Extremely high costs for energy, transport, packaging and raw materials as well as the high wage level in Germany make the production of tiles economically unattractive," says a spokeswoman for the company.
The family business Trimet in Essen and Voerde
Production has been down by 50 percent since autumn 2021, and by 75 percent in Hamburg. Reason for the restrictions: Trimet would no longer be able to cover the electricity costs without the production cutback.
In summary: The problems in Germany are mostly home-made. As early as December 2021 - well before the war against Ukraine and high gas and electricity costs - RWE boss Markus Krebber declared: Industrial companies were already reducing their production in order to keep the electricity supply and demand in balance. "If that becomes the norm, we risk creeping de-industrialization." The electricity price, Krebber continued at the time, is currently over 200 euros per megawatt hour - a few years ago it was around 20 euros. The gas price has multiplied within a few months.
Production has been down by 50 percent since autumn 2021, and by 75 percent in Hamburg. Reason for the restrictions: Trimet would no longer be able to cover the electricity costs without the production cutback.
In summary: The problems in Germany are mostly home-made. As early as December 2021 - well before the war against Ukraine and high gas and electricity costs - RWE boss Markus Krebber declared: Industrial companies were already reducing their production in order to keep the electricity supply and demand in balance. "If that becomes the norm, we risk creeping de-industrialization." The electricity price, Krebber continued at the time, is currently over 200 euros per megawatt hour - a few years ago it was around 20 euros. The gas price has multiplied within a few months.
Source: Tichys Einblick
Posts
