Companies migrate

Domestic industry is deep in recession

Industrial production has been hit hardest by the ongoing economic downturn.

(Bild: voestalpine)

Expensive wages and energy are slowing down competition, complain the bosses of domestic industrial companies. They are pressing for rapid rescue measures. Otherwise there is a threat of emigration, deindustrialization and even more dramatic job losses in Austria.

KTM is cutting a further 300 employees, the automotive supplier TCG is registering 882 of its 960 employees with the AMS because the industry's collective agreement wage increase of 4.8 percent is unaffordable - reports from the last few days that show that the domestic industry is on fire. It is heading for a third year of recession, the longest downturn in decades.

Unit labor costs have risen by 30 percent
"Unfortunately, what we warned about has come true. Now people must finally listen to us. In recent years, our unit labor costs have risen by 30 percent, compared to only 14 percent in Germany and 5.6 percent in Switzerland. Only five percent of companies now say they want to hire people in 2025," warns heat pump entrepreneur Kari Ochsner. "We are the only country where the industry was required to cover the entire inflation of the workforce. That was negligent."

Energy costs are also far too high in international competition. "We need state support for electricity grid costs and capped electricity prices until 2030." And Austria should simply not implement the controversial Supply Chain Act, Ochsner demands. In general, bureaucracy must be reduced.

Kari Ochnser, heat pump producer: "Negligent."

(Bild: IV NÖ/Christian Holzinger)

Federation of Austrian Industries calls for an "Austro-Musk"
Georg Knill, President of the Federation of Austrian Industry, is calling for an "Austro-Musk", which is committed to cutting red tape: "That would be a liberating blow for us." A process of deindustrialization is already underway, with domestic companies investing more abroad than in Austria.

(Bild: Krone KREATIV)

More investment abroad than in Austria
Hansjörg Tutner from the automotive industry also emphasizes: "Most automotive suppliers are no longer in Austrian hands. Investment decisions are made elsewhere." There is hardly any loyalty to the location, hard figures count.

Rosenbauer CEO Sebastian Wolf sees the biggest problems at the moment in the protectionism that is on the rise in many places. "Previously important markets such as China and Iran are closed to us," emphasizes the manager. Added to this are the sharp increases in unit labor costs, which are weakening Europe's competitiveness as a business location. Wolf: "We need an active economic policy and support for the real economy in Austria. We can only defend our prosperity and jobs in Austria with a foreign trade surplus.
defend them."

(Bild: Krone KREATIV/Stock Adobe)

The Benya formula does not fit the economic environment
The Benya formula for wage settlements (compensation = inflation plus productivity growth, note) is just as unsuited to the current economic environment as the "merit order" for energy pricing is to the gas price crisis. "Politicians must act quickly here," says company boss Wolf.

"All in all, Europe has not done itself any favors with the developments of recent years," says Semperit boss Karl Haider. The main problem: wage and energy costs are higher than in other parts of the world. "And the interest rate level is having a negative impact on financing activities."

Semperit boss Karl Haider: "Europe has not done itself any favors with the development of recent years."

(Bild: Semperit)

"The reluctance to invest in our most important markets of pulp and paper, automotive and steel has now lasted for over a year," notes Andritz CEO Joachim Schönbeck, adding: "Investments in the green transformation are being postponed due to political uncertainties. At the same time, customs barriers are being erected. We have our hands full trying to adapt."

Austria is losing its competitiveness
He would like to see "measures from politicians that increase our competitiveness and do not burden us. Reducing bureaucracy, free trade and the free movement of workers are right at the top of the list. This secures jobs and strengthens our location!"

Andritz CEO Joachim Schönbeck: "The reluctance to invest has now lasted for over a year."

(Bild: Zwefo)

Lenzing boss Rohit Aggarwal takes the same line: "Globally, inflation, high bureaucracy and high labor costs are a burden." His demand to a new government is to "reduce bureaucracy and turn away from the current policy of wanting to surpass EU regulations at a national level". Investment subsidies and a medium to long-term plan for the immigration of qualified specialists are also important.

According to the statement, it is "crucial for voestalpine that Austria remains competitive on the global stage - this means, among other things, no new taxes for companies and no further tightening of climate targets".