Spiegel Online has an in-English interview with the new chairman of the Federation of German Industries (Bundesverband der Deutschen Industrie), Hans-Peter Keitel. Keitel, the former chairman of the German construction giant Hochtief, assumed his new duties on January 1; BDI represents 100,000 companies with approximately 8 million employees.
Many of the problems facing the German economy run parallel to those in the United States, including tight credit markets and sputtering demand. The federal German government — a coalition of Christian Democrats (CDU and CSU) and the Social Democrats (SPD) — has responded with a $50 billion Euro stimulus plan. Other circumstances affecting manufacturers are different however; the interview touches on corruption scandals that have hit several major corporations in recent years.
Top-level message: Things are tough. From “Recession Is an ‘Existential Threat to Many Businesses‘”:
SPIEGEL: What are your members’ biggest problems at the moment? Declining orders? Sudden cancellations? Credit problems with the banks?
Keitel: All of these effects are related. The scenarios for which business owners should prepare themselves today include initially theoretical declines of 20 percent in sales and five percentage points in profit margins. Such developments already pose an existential threat to many companies. This makes it all the more problematic that credit conditions have clearly deteriorated. Many types of loans simply no longer exist.
SPIEGEL: In other words, the often-cited credit crunch has already been around for a while.
Keitel: We shouldn’t complain about it. Instead, we should discuss the problems openly with the banks, so that we can find our way out of the dilemma together.
SPIEGEL: But the German government has already approved a €480 billion ($658 billion) rescue plan, although very few financial institutions have taken advantage of it so far…
Keitel: … partly because the details of the conditions for these government bailouts may have to be changed.
Spiegel gets into issue of EU climate regulation right off the bat. He seems quite supportive of maintaining the regulatory regime, despite its deleterious effects on the manufacturing economy and European competitiveness, but then, he was put on the spot.
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