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German Manufacturing At Risk Because Of Low US Energy Prices

Finanz Nachrichten

The CEOs of manufacturing industry are warning that production in Germany is at risk because of low energy prices in the United States. The energy prices there are now only a third of those in Germany.

“This can have dramatic consequences for the competitiveness of the manufacturing sector,” said Axel Heitmann, CEO of the chemical company Lanxess. “Many industrial companies are planning to build new factories in the U.S. and not in Europe because of low energy prices there,” said Gisbert Rühl, chief of steel trader Kloeckner. “We are now reacting to this development and plan new business units in the United States.” To move production to the U.S. is especially attractive for companies in energy-intensive industries such as steel and aluminium or chemistry.

“We want to keep our production in Germany, but the right decisions by policy makers are needed so that we can do that for the long term,” says Lanxess CEO Heitmann. The company bosses also expressed their concerns during talks with German Economics Minister Philipp Rösler (Free Democrats, FDP) in Davos. “The concerns of our industry, that Germany could be weakened by high energy prices, are not unfounded,” told Rösler the “Handelsblatt”. “We all should take these warnings seriously.”

Some companies have already decided to shift investments abroad. Roesler warned that the energy revolution must not disadvantage companies with energy-intensive production. “Our industry is the basis for growth, prosperity and employment. This must not be compromised, for example through as a shortage of emission allowances, which leads to higher costs for the companies,” said Roesler.

Translation Philipp Mueller

FinanzNachrichten, 25 January 2013