German steel fabricators request partner consultation, not conflict

The majority of steel and metal processing companies in Germany expect a sharp fall in sales from the coronavirus outbreak, according to their association, WSM (Wirtschaftsverband Stahl- und Metallverarbeitung). The association is calling on larger companies with market power in the industrial supply chains to seek dialogue with their medium-sized business partners, and not to pass on all risk to them.  

In a survey among its mostly medium-sized member companies at the beginning of April, more than 85% of the companies says they expect a decline in sales of more than -10% in 2020. Almost 30% of those surveyed expect a decline of more than -25%. More than 90% of the companies surveyed are planning for, or are already in, short-time work, most of them are halving working hours.

It is important now to approach the crisis in partnership and to be prepared for the time after the pandemic, the association claims. This means that those involved in industrial value chains should not support their own positions with legal arguments, says WSM’s managing director, Christian Vietmeyer.

“Companies with market power, which recently demanded delivery guarantees from their suppliers, are now cancelling every order and refusing acceptance,” Vietmeyer tells Kallanish. “Some do not communicate and others insist on maintaining their legal standpoint. Suppliers of raw materials are not willing to talk about adjusting quantities,” he says of the situation. “All those involved must quickly return to a dialogue based on partnership,” he adds.