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Foundry industry: “Making us in Germany vulnerable right now”

Issued at 2023-06-19



Dhe composition seems unfair. “Politics meetsbusiness is the name of a panel discussion at the metal trade fairs GIFA, Metec, Thermprocess and Newcast in Düsseldorf. And Mona Neubaur, Minister for Economics, Industry, Climate Protection and Energy of the State of North Rhine-Westphalia, has to be on the podium there with five representative from the metal industry such as steel, plant construction or foundries.

However, the Greens politician will not be driven into a corner by the superior power of industry, given issues such as energy prices, bureaucratic burdens or deindustrialization. On the contrary: there is even broad agreement between the two sides.

In any case, Neubaur shows a lot of understanding for the concerns of the economy and talks about planning security, which must be created so that companies remain able to act and invest again. In addition, it is positioning itself aggressively with the will to establish an industrial electricity price.

“Our proposal is on the table: we want an industrial electricity price, financed by the economic stabilization fund,” says the deputy prime minister of North Rhine-Westphalia. “However, I do not perceive that the Federal Ministry of Finance and the Federal Chancellery consider this a good thing and are involved in finding a solution.”

This causes problems, for example, in the foundries in Germany. The approximately 600 companies in the predominantly medium-sized sector fear for their existence due to high energy prices. “We are now losing a number of orders,” reports Clemens Küpper, President of the Federal Association of the German Foundry Industry (BDG), in the WELT interview.

Customers are increasingly ordering from competitors abroad, above all in Turkey and Poland, but also in France and China Because electricity and gas are so much cheaper there that the additional logistics costs are not even a factor.

Important role in the value chains

According to Küpper, the production of large series in particular takes place across the border. This refers to orders for components from a quantity of 100,000 pieces. “We are making ourselves vulnerable and vulnerable in Germany,” complains the entrepreneur. “Because investments like this also depend on orders like this for the client. So they’re not coming back anytime soon, if at all.”

In fact, foundry products play an important role in the value chains in a number of industries. “Casting appears almost everywhere,” says BDG CEO Max Schumacher, citing, among other things, cars, machines, drives, household appliances, medical technology wind power and solar systems, and heating pumps.

With these orders of magnitude, every additional cent in the electricity and gas price makes itself felt. “But we’re not talking about a few cents that have become more expensive: the jump recently went from three cents to 42 cents,” reports BDG President Küpper, who runs the Baumgarte iron foundry in Bielefeld as his main job.

“We need a competitive industrial electricity price – and we need it to be quick and unbureaucratic.” There shouldn’t be any more application battles or solutions in which the criteria are changed afterwards. “We need planning security.”

The domestic foundry industry, which is currently the fourth largest of its kind in the world receives support from the IG Metall trade union. “If there isn’t a competitive industrial electricity price for energy-intensive industry quickly, then the lights will go out. And not because there is no electricity, but because it is no longer affordable,” warns Jürgen Kerner, chief cashier and executive board member of IG Metall.

The employee representatives fear the end of many foundries and thus of thousands of well-paid industrial jobs, of which there are currently around 70,000 in the industry. Especially since most companies only have one location. And if that is no longer economical, it is not just a business location that is lost, but the entire company.

A number of cast parts are installed in wind turbines in particular

There is also a strategic problem. “If there are no more foundries in Germany, we will be even more dependent on the goodwill of others. Then we are dependent on raw material supplies from abroad. And Corona and the war have shown how quickly these deliveries can fail,” says Kerner.

Industry representative Küpper attributes the lack of political support to date to ignorance. “Politicians often have no idea what we’re doing and why it’s important,” says the entrepreneur. On the other hand, there is a basic distrust and above all a lot of ideology especially in the Federal Ministry of Economics.

“We are the ones who make an energy transition possible in the first place.” In wind turbines, for example, there are a number of cast parts, from shafts for power transmission to hubs and machine supports.

“If these parts are manufactured abroad, we no longer have any influence on the CO₂ footprint,” Küpper warns of the so-called carbon leakage effect, i.e. the shifting of emissions. “This does not help the climate – on the contrary.” At the same time, other standards are often no longer verifiable or influenceable, such as environmental impact or the issue of occupational safety.

And especially when it comes to wind power,  China has now conquered the world market. “That’s where the orders go,” says BDG Managing Director Schumacher. At the same time, specialized foundries on the coast in this country would have had to close.

“We would actually have to build five plants and furnaces on the coasts in order to advance the expansion of wind power there.” Instead, the capacity for this topic in Germany has halved. And that has consequences. “We would no longer be able to independently supply enough components for the expansion of wind power.”

Meanwhile, Minister Neubaur promises to campaign again for the foundries and the metal industries in general in political Berlin. “It is clear that we must take action.” In any case, she will not simply give up NRW as the industrial heart of Europe.

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Source: breakinglatest.news



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