Industry: Hannover Messe in multiple crisis mode

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    For the first time since 2019, the largest industrial exhibition will again be based on personal contacts. Politicians are trying to give the economy confidence again. But the problems are omnipresent.

    If not now then when? The big topics of the Hannover Messe 2022 – climate protection, energy efficiency, digitization – were also known to the Federal Chancellor for a long time.

    A few months ago, even the organizers could not have imagined that several current crises, including a war in Europe, would have to be dealt with at the most important industry meeting this year. Olaf Scholz emphasized: The change must come quickly. “The pandemic and the war do not take away the urgency of industrial transformation,” he said at the opening.

    Scholz rather reserved

    The SPD politicians outlined the vision as follows: Industry should use fewer resources, produce less carbon dioxide, become more digital and use artificial intelligence and hydrogen. And it’s good to see “that with this great speed we will also manage to operate CO2-neutrally in a very short time,” said Scholz. Germany’s economy on the way to climate neutrality – the Chancellor was also noticeably reluctant to make economic assessments during his tour of the trade fair.

    A certain uneasiness can be felt at a number of stands, and the mood at times seems almost schizophrenic. On the one hand, the consequences of the war in Ukraine on the global economy – including, above all, drastically more expensive energy – should accelerate the switch from gas and oil to renewable sources and thus benefit the business of numerous providers. On the other hand, however, there is the fear that, at least in the medium term, we will still be dependent on the fossil fuel superpower Russia for a while.

    So is it real confidence or rather purposeful optimism that can be heard here? Many exhibitors are relatively in a good mood. At Festo, for example, a manufacturer of automation technology, they are confident that they will be able to work CO2-neutrally at all 250 locations worldwide as early as next year. At the company’s booth, Scholz tested the mobility of a robot with a pneumatic drive and gently steered the robot arm in different directions.

    Portugal is a partner country

    The reuse of materials is also becoming more important in many areas. On the joint tour with António Costa, Premier of this year’s trade fair partner country Portugal, Scholz posed briefly in front of a bicycle made entirely of recycled plastic.

    However, the dependency on gas in particular cannot be reduced to zero overnight. In chemistry and also in mechanical engineering, various materials without methane, ethane and other natural gas components are not possible – even if alternative methods are gradually gaining ground. And most of the gas still comes from Russia for the time being, albeit less than a few months ago. Liquefied natural gas (LNG) terminals will not be ready until the turn of the year at the earliest.

    Inflation is a headache

    Despite the current challenges, the industry bosses themselves did not want to show themselves too grumpy. In Hanover, however, they pointed out the increased risks for the global economy. The rapid inflation – partly caused by the beginning of the war – has in some places already caused producer prices to rise to mid double-digit rates. Consumers of end products also have to see how they can cope with the very high inflation by European standards. According to the Federal Statistical Office, inflation in May was already 7.9 percent.

    The President of the Federation of German Industries (BDI), Siegfried Russwurm, did not mince his words. “We are in a difficult, depressing, uncertain environment,” he said. Nevertheless, the member companies are “responsible for isolating the aggressor Russia and overcoming our dependence on Russian energy supplies”.

    The tightrope walk is not to promote renationalization and damage the free trade system as a whole, despite all the insistence on independence. This insight was already there during the second major crisis in the industry: the global shortage of microchips. The motto is more in-house production in Europe, but without choking off international exchange. “Without raw materials, there would be no Industry 4.0 and no e-mobility,” emphasized Russwurm. “But stronger differentiation is needed here.”

    Staff shortages in technical occupations

    Unlike oil and gas, the following applies to many electronic parts: Critical resources also come from China, and Asian trade has slowed considerably since the new corona lockdowns. The sources of supply would have to be more diverse, Russwurm warned: “It’s just more sensible not to put all your eggs in one basket.” The President of the Electrical and Digital Association ZVEI, Gunther Kegel, appealed to leave world trade open: “We have no other chance.”

    In addition, there is another, particularly problematic shortage: that of skilled personnel in technical professions. According to the Association of German Engineers (VDI), around 151,300 positions could not be filled in the first quarter. According to an analysis by the consulting firm Capgemini, Germany even has plenty of potential for even more engineers and computer scientists. According to this, 45 percent of the companies surveyed in Germany consider the modeling and simulation of processes with the help of digital images (“digital twins”) to be a strategically important task – globally it is more at 55 percent.

    For one of the hosts, Lower Saxony’s Prime Minister Stephan Weil (SPD), the much-cited Industry 4.0 is now a worldwide attribute for products from Germany: “Many companies are really adapting to what is expected of them.” In view of the difficult framework conditions such as disrupted supply chains and the wave of inflation, this is to be credited to them.