Within a 24 hour period, German manufacturing has been rocked by four separate century-old companies declaring insolvency as energy costs and inflation continue to spiral across Europe.
Germany has the biggest economy in the European Union, with a GDP of over 3.57 trillion Euros in 2021. Its position as the fourth largest economy in the world is based on exports of high-quality manufactured goods including vehicle construction, electrical industry, engineering and chemical industry.
Yesterday German media reported that construction company Wolff Hoch- und Ingenieurbau had been forced to declare itself insolvent – that is, unable to pay its debts – amid the ongoing crises.
This is particularly notable as the company in question is over 125 years old.
According to German news outlet Focus.de, the company’s managing director Martin Herrmann cited the skyrocketing price of raw materials such as wood, plastic and steel due to inflation, and massive staff shortages due to the Covid-19 lockdown, as the reasons for the companies financial woes.
On the same day, German sweet manufacturer Bodeta, famous in Germany for its eucalyptus menthol sweets, has also filed for bankruptcy.
This company was 130 years old.
A company spokesman said that the company could no longer keep up with rising energy costs, increased prices of vital raw materials such as sugar, and also an increase in minimum wage which took effect in Germany from October 1st.
Meanwhile, German car component supplier Borgers, which is 156 years old, has also been declared insolvent.
The company employs 6,000 people and supplies textile components to the automotive industry. While the company was struggling financially in recent years regardless, the hike in energy costs, the price of raw materials and supply chain issues appear to have been the straw that broke the camel’s back.
At the same time, German soap manufacturer Kappus has also filed for bankruptcy, citing the increased cost of raw materials and energy as the reason.
The company is a whopping 174 years old, having existed since 1848 – around the time of the Irish potato famine. It was once the largest soap manufacturer in Western Europe.
Last week it was reported that the president of the German Chemical Industry Association (VCI), Markus Steilemann, said that the country may become an “industrial museum” if circumstances continue to worsen.
One of Germany’s prominent business leaders has hit out at that country’s energy policies, saying that the current energy crisis and the emphasis on unreliable renewables means it is at risk of going from an industrial country to an “industrial museum”.https://t.co/fA3P5eE5Mo
— gript (@griptmedia) October 11, 2022
Additionally, in September, leaders within the metal working industry in Europe have warned the EU that the continent could face “permanent de-industrialisation” if the bloc does not take steps to ease pressure on businesses from the energy crisis.
— gript (@griptmedia) September 19, 2022