Strong franc leads to increased short-time working in industry
Published: Tuesday, Jan 9th 2024, 13:01
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The strong franc is causing increasing concern in industry. Incoming orders for industrial companies have been shrinking for some time now, and the franc, which strengthened to new records towards the end of 2023, is now making it even more difficult to export goods. Short-time work is therefore on the rise again.
One example of this is Bystronic. The mechanical engineering company confirmed to AWP media reports from last week that 170 out of 700 employees at its headquarters in Niederönz are currently on short-time working. "Like many Swiss companies, we have been significantly affected by the strong franc," it said in a written statement.
"In the first half of 2023 alone, the strong Swiss franc cost us almost 30 million francs in sales. And overall, a negative impact on operating profit of several million francs is expected," says Bystronic.
Short-time working has been in place since November and will continue until the end of January. A possible extension of the measure will then be examined. Production and production-related areas are affected. However, there is currently no need for short-time working in other areas.
According to Swissmem, short-time work has increased significantly since the summer
Swissmem confirms that short-time work is on the rise again. Although the umbrella organization of the tech industry does not have exact figures, it told AWP: "Starting from a very low level last summer, the number of companies with short-time work has increased significantly."
This trend is also continuing, which is not surprising given the recession in which the tech industry finds itself: "Incoming orders are falling sharply and exports to Germany, the USA and China are continuing to decline," says Swissmem. "The dramatic appreciation of the Swiss franc is likely to further exacerbate the situation."
Short-time working is also on the agenda at Phoenix Mecano, for example. The component and housing manufacturer and specialist for drive systems for movable furniture or hospital beds announced on request that "due to the weak industrial economy, especially in Germany, individual production sites are considering the introduction of short-time working." One site in Germany has already introduced this.
However, Phoenix Mecano considers itself to be "only slightly affected by the strength of the Swiss franc". This is because the Swiss business accounts for less than 5 percent of total Group sales and the global network of production and sales locations enables natural hedging.
Only "individual departments" affected at GF
At the much larger industrial corporation Georg Fischer (GF), "only individual departments are affected, with no more than 50 percent of employees". For example, "the seasonal fluctuation in demand at our GF Machining Solutions site in Losone will be countered by temporary short-time working for a few weeks."
"However, the general introduction of short-time working at the Swiss sites is not currently planned," GF continues. Fluctuations are generally cushioned with other measures such as the reduction of vacation credits or overtime.
It has also been known for some time that part of the workforce at zipper and luxury accessories manufacturer Riri, which has been part of the Oerlikon industrial group since last March, will be working reduced hours. And Feintool, a company with a strong focus on the automotive industry, is also reducing working hours, both at sites in Europe and in Switzerland.
In its statement, Swissmem also criticizes the behavior of the authorities. "Unfortunately, certain cantonal offices are only issuing extremely restrictive permits for short-time work. This could force companies to make redundancies." The tech industry exports 80 percent of its products, so the dramatic appreciation of the Swiss franc is a major burden for practically all companies.
Seco sees increase in applications for short-time work
Seco is also seeing a trend towards increased short-time working. "Recently, more companies have applied for short-time work," explained Boris Zürcher, Head of the Labor Directorate at Seco, on Tuesday at the presentation of the latest unemployment figures. However, the short-time working allowances are still hardly being used. Nevertheless, Zürcher also expects payments of short-time work compensation to increase in the future.
The industrial supplier Bossard is also already resorting to short-time working. "In Switzerland, we have introduced short-time working for three months for part of the workforce, specifically 60 percent, from January 2024," said CFO Stephan Zehnder. As a specialist in fastening technology, Bossard serves a wide range of industries and is therefore also considered a leading indicator.
Among the companies surveyed by AWP, short-time working is not yet an issue for some, such as agricultural and municipal machinery manufacturer Bucher Industries, marine turbocharger manufacturer Accelleron and Uri-based sealing specialist Dätwyler.
Bucher Industries' plants in Switzerland are currently operating at full capacity. "No major relocation of jobs from Switzerland to other countries or similar measures are planned," says Bucher.
Accelleron CEO Daniel Bischofberger emphasizes that with almost 1000 employees out of a total of 2700, a high proportion of value creation continues to take place in Switzerland and adds: "The introduction of short-time working is currently not an issue".
Of Datwyler's 27 production plants, only the plant in Schattdorf and the headquarters in Altdorf have always been located in Switzerland. In addition, the Swiss plant mainly invoices in Swiss francs. "The order situation at the Swiss plant is good and therefore short-time working is not an issue from today's perspective."
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