Head of Major German Manufacturer Warns of ‘Deindustrialisation’ Risk

Photo taken in Magdeburg, Germany
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Chris Tomlinson

Nikolas Stihl, the head of the chainsaw manufacturing company Stihl, has wanted that Germany may be on the verge of deindustrialisation as surging costs — pushed by the energy crisis — and other factors are affecting entrepreneurs.

According to Mr Stihl, chair of the Stihl Group Advisory and Supervisory Board, Germany could be at a tipping point that could lead to deindustrialisation in the country as it becomes less and less attractive as a location for industrial manufacturing and other businesses.

“The danger of deindustrialisation cannot be dismissed out of hand,” Stihl told German media and added, “The German location could eventually reach a tipping point with a strong negative impact on the willingness to be entrepreneurial in this country,” the newspaper Die Welt reports.

Stihl noted that while Germany is a relatively expensive place to do business, companies have been able to manage but noted, “the developments in the area of bureaucracy, the cost burden, the lack of investment, which we urgently need – this leads to the fact that the location conditions in this country are getting a little worse every year.”

“We are not renewing our infrastructure enough, building too little and not innovative enough. We are watching as the most important competitors in the world – such as the US and China – overtake us left and right,” he said.

Other costs are also likely to play a major role in possible industrialisation in Germany in the coming years, including the surge in the price of energy as Germany and some other European nations have largely relied on cheap gas from Russia, which has become unreliable in the wake of the Russian invasion of Ukraine and subsequent European sanctions.

Earlier this year in October, the fears of deindustrialization in Germany were noted as soaring energy prices forced the ArcelorMittal steelworks in Hamburg to idle their production. Uwe Braun, CEO of ArcelorMittal Hamburg, warned that rising energy costs could force part of the production process to be relocated.

Just a month prior, German Vice Chancellor and Minister for Economic Affairs Robert Habeck stated that some businesses may simply just have to shut down production due to energy shortages and costs when asked if he thought firms may go bankrupt.

Last week, Klaus Müller, the head of Germany’s Federal Network Agency energy watchdog, called on the German public to reduce their gas consumption due to concerns Germans were going through supplies too quickly.

 

Follow Chris Tomlinson on Twitter at @TomlinsonCJ or email at ctomlinson(at)breitbart.com.

 

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