The CEO of Trigema (clothing manufacturer within Germany) gave an interview for today.
Basically, he said that if electrical prices 'stay' (currently five times what they were a year ago)....a fair amount of industry will lay off German employees, because they can't produce products and compete against 'others'.
Odds of this trend? I'd personally suggest a 90-percent chance, and likely to see the layoffs starting by December 2022.
Wholesale electrical cost (per Megawatt Hour) stood at 74 Euro back in the summer of 2021 (Statista numbers). May of 2022? Around 218 Euro.
I should note, prior to the Covid period...the Megawatt Hour rate was bouncing between 30 and 40 Euro.
Blame? Well....you can stand there and blame the coalition governments of both the CDU/CSU, and SPD folks....over the past thirty years in helping the structure to reach this level. The priority was always 'clean' and 'pure' energy.....'cheap' energy was considered dirty and 'sinning' in various ways.
At this point....to produce anything (beer is a good example)...you burn natural gas (for the bottle production) or use electricity (to brew or deliver the product). So you can examine any product and reach a point where the normal regular cost is affected.....so you raise the price. At some point, the competition (non-German) has a plus-up and opportunity to beat your product.
So as bad as inflation seems today....once the layoffs occur, and the unemployment rate ramps up a percent or two....the government is supposed to respond. But in this case...there's little left in the 'toolbag' to make any energy cost less.
If you were expecting any great positive numbers for the top one-hundred German companies for this year or 2023....there's just not going to be much to say.
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