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Challenges Facing Traditional Industries Amidst Rising ...
2024-10-12 23:55:09
Business
Economy
Companies

Challenges Facing Traditional Industries Amidst Rising Insolvencies

The insolvency of Anhaltische Elektromotorenhersteller (AEM), a historic company employing 150 people, highlights the struggles facing traditional industries in Germany. Managing Director Reiner Storch is actively seeking new investors to navigate this crisis.

Current economic conditions are dire, with insolvencies at record levels, as noted by the Leibniz Institute for Economic Research. Experts warn of further increases due to factors such as weakened economic performance, customer payment issues, and rising energy costs.

The mood among entrepreneurs has deteriorated significantly, marking a concerning trend for the future of the German economy. As companies grapple with these challenges, the path to recovery remains uncertain.

Related news on that topic:

Record Surge in Corporate Insolvencies Amid Economic Challenges

The third quarter of 2024 has witnessed a record surge in corporate insolvencies in Germany, with 3,991 cases of partnerships and corporations declaring bankruptcy. This marks the highest level since the financial crisis of 2010, which recorded 4,071 insolvencies. The increase is attributed to economic weakness and residual effects from the COVID-19 pandemic. During the pandemic, government support programs artificially suppressed insolvency rates, which are now correcting. The rise in insolvencies is not uniform across the country. Bavaria and Baden-Württemberg have experienced the most significant increases, with insolvency rates climbing by 56% and 42% respectively. Notably, business-related services saw insolvency rates increase by 31%, while the real estate and housing sectors reported a staggering 69% rise. The economic downturn has been exacerbated by the slow recovery from the pandemic, with many companies unable to sustain operations without the previously available government aid. The impact extends beyond small businesses to larger enterprises, resulting in significant job losses. In September alone, the insolvencies of larger companies resulted in 23,000 job cuts. As Europe navigates these economic challenges, experts predict that insolvency rates may continue to rise in the coming months. The German government has revised its economic forecast for 2024, anticipating further difficulties. Meanwhile, the European Court of Auditors has criticized the slow uptake of COVID-19 relief funds, which could have further mitigated the current financial strains on businesses. The situation calls for vigilant economic policies to stabilize the market and support affected sectors.

Economic Struggles in Oberberg Region

The recent IHK business survey highlights a troubling economic scenario in the Oberberg region. Companies face declining orders, reduced investments, and significant job cuts. Approximately 41% of businesses report poor conditions, while 56% experience a drop in orders. Only 14% plan to expand their workforce. Financing issues affect one in five companies, exacerbated by skilled labor shortages, high costs, and bureaucratic hurdles. The employment indicator shows a negative trend, with recession fears looming. Many businesses are cutting temporary staff to cope with the downturn. There is a prevalent call for stable economic policies, with businesses urging against increased taxes on commercial properties. The economic climate reflects structural challenges, demanding immediate attention to foster recovery and growth.

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The press radar on this topic:

Frankfurter Rundschau
12. Oktober 2024 um 13:21

Insolvency of a Traditional Company: 150 Employees Affected by Engine Manufacturer Bankruptcy

Economy
The traditional company Anhaltische Elektromotorenhersteller (AEM) has filed for insolvency; 150 employees are affected. Managing Director Reiner Storch is optimistic about finding new investors.
tz
12. Oktober 2024 um 12:47

Insolvency of a Traditional Company: 150 Employees Affected by Motor Manufacturer's Bankruptcy

Economy
Finance
The traditional company Anhaltische Elektromotorenhersteller (AEM), founded in 1872 as Bamag, has filed for insolvency; 150 employees are affected; the management is optimistic to find new investors; sales losses due to fewer orders from customers and suppliers; record high insolvency wave in Germany due to economic weakness, payment problems of customers, high energy and consumer prices, as well as bureaucracy and tax burdens.
CW

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