Press Release No. 21/2010 IG Metall and VDMA: Securing the Upturn in the Machinery Industry and Preventing a Credit Crunch

Frankfurt am Main – IG Metall and the German Engineering Federation (VDMA) have called on banks to fulfill their special responsibility to support an upturn in the machinery manufacturing sector and safeguard the associated jobs. In a joint statement presented Tuesday in Frankfurt, the two associations demand that banks live up to their role in corporate financing during the nascent economic recovery and ensure fair terms when granting loans.

The availability of credit from banks is a pressing problem, emphasized Wolfgang Rhode, executive board member of IG Metall. “We share the fear that, as the economy picks up, the availability of credit will become a serious source of risk,” said Rhode. The credit pipeline must not be blocked as conditions gradually improve. “When companies start receiving orders again, this must not be thwarted by the banks,” Rhode insisted.

While there is still no credit crunch in the machinery manufacturing sector, conditions for individual companies have deteriorated significantly in some cases, said Hannes Hesse, CEO of the VDMA. “Financing for companies is crucial to ensuring that a long-term, stable economic recovery is not stifled,” Hesse emphasized. Banks are called upon to support the industry in its further development.

The joint statement further states: “With their knowledge and skills, employees are the most important foundation for meeting the challenges of the next economic upswing. It is therefore a shared concern of the VDMA and IG Metall to retain the great potential of employees in the machinery manufacturing sector.”