Stihl, the renowned Baden-Württemberg saw manufacturer, has issued the German government an ultimatum to improve conditions for businesses. According to the company's supervisory board chairman, Nikolas Stihl, "If the conditions for our location improve under the new government, we are willing to build new production here in the region. The government now has until 2030. Otherwise, we are considering investing abroad." This statement was reported by the newspaper Augsburger Allgemeine.
The planned site for the new factory was originally set for Ludwigsburg, but Stihl cited several concerns driving the potential relocation: increased construction costs, rampant bureaucracy, and high labor costs. Stihl lamented, "The German location has massively lost competitiveness within a very short time. We need to turn around urgently. Germany is backed against the wall."
While Stihl has operated for about 50 years producing chainsaws and related equipment, rising operational challenges have pushed the company to explore international options. Stihl mentioned Switzerland as a viable alternative for the new facility, explaining, "Despite higher wages, the hourly cost is roughly ten percent lower than in Germany due to longer working hours and less bureaucracy."
With the recent shift toward electric devices, Stihl remains steadfast about the future of gasoline-powered chainsaws. The firm has been making significant investments to develop eco-friendly fuel alternatives aimed at reducing CO2 emissions.
Stihl's warning is not entirely new; it adds to previous concerns the company expressed about the deteriorizing conditions for industrial operations within Germany. Amidst their announcement of postponing the Ludwigsburg factory, Stihl also pointed to labor union demands for reduced working hours as part of the challenges contributing to its decision.
Throughout 2022, Stihl achieved record profitability. Yet, as the costs of doing business continue to climb, Stihl is contemplating reducing its workforce, hinting at volatility within its operational strategies if the German government fails to respond substantively. "We must invest here primarily in rationalization, meaning increasing automation of production to offset rising costs."
The company has previously criticized the political climate for discouraging investment. According to Nikolas Stihl, "The German location could reach a tipping point with strongly negative consequences for the willingness to operate business here." He made statements indicating frustrations targeted at both political parties and EU regulations concerning manufacturing overheads.
The urgency of Stihl’s ultimatum underlines how competitive pressures and operational costs must be adequately addressed if Germany aims to retain its industrial base. With plans for significant restructuring, the company highlighted the importance of reassessing current regulatory frameworks.
Stihl continues to express dedication to maintaining jobs within Germany, reflecting broader concerns about deindustrialization and the loss of manufacturing roles. They have stated, "Industrial jobs lost will not return," illustrating the stakes involved.
The ultimatum, framed by Stihl's leadership as both cautionary and definitive, marks one of the industry's more significant calls to action for German policymakers. Klar and pointed, the message stands clear: If there is no improvement by 2030, alternatives will be explored beyond Germany's borders.