In February 2025, following the end of Germany's so-called "traffic light coalition," a new parliament will be elected to establish a fresh government. However, it will take valuable time before a stable and operational administration is in place. This delay disproportionately affects energy-intensive industries like foundries, which are already struggling under the weight of rising energy costs.
In an interview with the magazine Wirtschaftswoche the managing directors of Siempelkamp, Georg Geier and Dirk Howe, are raising the alarm. As leaders of a global foundry industry giant based in Krefeld, they warn of the dramatic impact the energy crisis is having on medium-sized enterprises. Siempelkamp employs 450 people and produces 60,000 tons of cast iron components annually for high-tech industries worldwide. However, skyrocketing energy prices are putting immense pressure on both the company and the broader industry.
High Energy Prices: A Threat to the Entire Industry
“Our industry is under massive pressure,” says Dirk Howe. He points to a long list of insolvencies within the foundry sector, primarily affecting small and medium-sized businesses. High energy costs, stringent regulations, and subsidized competition from China are driving many companies to the brink. “These burdens not only threaten foundries but also the innovative strength of Germany’s mechanical engineering sector,” adds Georg Geier. The loss of domestic suppliers would have severe consequences for key industries such as chemicals, pharmaceuticals, and exports.
Innovation and Global Focus as a Survival Strategy
Despite the challenges, Howe emphasizes that Siempelkamp is faring better than many competitors thanks to its focus on innovation and a global market strategy. “We have automated, digitized, and concentrated on lucrative niches,” he explains. The company is particularly strong in the energy sector and in structural components for raw material extraction and processing. Its international presence, with clients in the U.S., Latin America, and Australia, provides additional stability.
Energy Crisis Forcing Inefficient Practices
Germany's extreme electricity prices—peaking at over €800 per megawatt-hour—are forcing the company into inefficient practices. “We adjust our furnace operations based on hourly electricity prices to save costs,” Howe explains. This approach is not only inefficient but also conflicts with energy efficiency regulations. Moreover, growing complexity from new regulatory requirements compounds the challenges. “Our flexibility is severely restricted by labor laws and societal expectations,” notes Geier.
Bureaucracy and Lack of Strategy Stifle Medium-Sized Businesses
Georg Geier and Dirk Howe sharply criticize the lack of support for medium-sized businesses in current energy policies. “In the past, I spent 80% of my time optimizing foundry processes. Today, 80% of my time is consumed by navigating energy bureaucracy,” says Howe. The company must wade through a maze of regulations just to maintain its competitiveness.
An Urgent Call to Action
For Geier and Howe, the solution is clear: Immediate political action is needed to safeguard Germany’s industrial base. They advocate for the creation of an Energy Task Force, comprising experts from both business and politics, to develop swift and pragmatic solutions. “We have no time to lose. Without quick action, this storm will become a hurricane,” warns Howe. Ideology-free solutions and cross-party collaboration are essential.
Conclusion: No Future Without the Mittelstand
The Siempelkamp executives stress that medium-sized enterprises are the backbone of Germany’s economy. “Without the Mittelstand, there’s no value creation, no innovation, and ultimately no political stability,” says Geier. Their plea: Restore predictability and reliability to ensure the long-term competitiveness of German industry.
