BERLIN/FRANKFURT - In Germany's industrial heartland, engineering firms have come up with a recipe for surviving the coronavirus pandemic.
Stihl, for example, took an unusual step when lockdowns hit sales of its chainsaws, lawn mowers and hedge trimmers. It carried on making them and helped some of its struggling retailers stay afloat by extending their payment terms, Chief Executive Bertram Kandziora told Reuters.After a tough couple of months, demand soared for Stihl's tools as people stuck in lockdowns spruced up their gardens.
An August survey by management consulting firm McKinsey of over 2,200 SMEs in five European countries showed fewer German firms feared they would have to postpone growth programmes than companies in France, Italy, Spain and the United Kingdom. "Because of the negative attitude of the banks, the family owning the company then came to the conclusion that they should not let the banks dictate their policy but should in future finance the company from their own resources," Dr Kandziora said.
Commerzbank, however, says many industrial Mittelstand companies have the financial buffers to ride out the storm. "We have made and will continue to make sustained and significant investments in research and development and further digitisation this year and next year. The demand for digital solutions has been given a further enormous boost by corona - this is a huge opportunity for us," Chief Executive Stephan Seifert told Reuters.
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