The recession is supposedly bottoming out, but where is the upswing? The crisis is hitting southern Germany particularly hard as engineering companies and auto parts manufacturers lose orders at a faster pace than ever before. Ironically, their strength as exporters is the cause of their current troubles.

Karl Schlecht is standing on the roof terrace of his company headquarters, looking down at his life’s work. He moves carefully toward the railing. Schlecht is 77, his bones ache and his new hip is causing problems. But his ailments are minor when compared with the worries of Putzmeister, the company he founded 51 years ago in Aichtal, a town in Germany’s southwestern Swabia region.

“It makes my heart ache,” says Schlecht, as he stares out at an area devoid of human activity. There is no one to be seen on the factory grounds — no metal workers, no mechanics, no engineers. Most of the employees have been on short time since January, and the concrete pumps and mortar machines the company produces are beginning to accumulate throughout the plant — inventory for which there are no longer any buyers. In other words, dead capital.

Only last year, Arab and Asian buyers were clamoring for Schlecht’s products. Putzmeister had erected a separate building for making large pieces of equipment designed to convey concrete and mortar hundreds of meters into the sky on high-rise building construction sites in Dubai, Beijing and Shanghai. “It was like a beehive,” says Schlecht, referring to the amount of activity in the new building. But nothing is humming on those sites anymore.

Order volume has declined by more than half, and Putzmeister is already losing €5-10 million ($7-14 million) a month. Management consultants have analyzed the company’s operations and recommended sharp cutbacks. “Well,” says Schlecht, “we’ll have to cut the company in half.” And this at a time when others are already hoping for a turnaround in the economy?

Putzmeister, with its 3,600 employees, was until recently still being celebrated as one of those typical mid-sized, virtually unknown German companies that is a world leader in its niche market. Many of these companies are mechanical engineering companies and auto parts suppliers, produce first-class products, have exceptional expertise and export a large share of what they make. Putzmeister, for example, exports about 90 percent of its products.

Source/Full Story: SPIEGEL ONLINE