Junius: "In the end, we can only be competitive by working together"

Hans-Toni Junius © Christian Kruppa

The economic consequences of the Corona crisis are incalculable for family businesses. In an interview at the beginning of April 2020, Hans-Toni Junius, Chairman of the BDI/BDA SME Committee, comments on current issues: “Many SMEs are internationally active; we do not need or want protectionism.”

Hans-Toni Junius, leading partner in the sixth generation, has the task of managing C.D. Wälzholz GmbH & Co. KG in Hagen (NRW) through this difficult time. He is chairman of the BDI/BDA committee for medium-sized companies.

Mr. Junius, as an entrepreneur, how do you experience the Corona pandemic?

We are feeling the economic slump. The business outlook for the coming weeks is very gloomy. We are helped by the fact that our operations in China are starting up again and Brazil and the USA were stable until recently. In the crisis, it pays off to have spread risks and opportunities more broadly over the past few years. Without open borders worldwide, the slump in Germany would be much more severe. Anyone who now advises protectionism is doing a disservice to medium-sized industrial companies.

What about the jobs in your company?

As a matter of principle, it is part of the shareholder family's self-image to manage the company sustainably, also by securing good jobs and earning opportunities for our employees. It is part of our DNA to deal responsibly with our workforce at home and abroad and to keep an eye on the welfare of the families of our company's employees. As management, we strive for personal contact and open exchange by being accessible to our employees even in difficult situations. As a supplier to the automotive industry and in view of the closely meshed climate policy, we feel strong pressure to change in the value-added network. We have therefore announced short-time work in some areas, and corona is now adding to the difficulties. We are using all operational possibilities to secure employment. For Germany as a whole to get through the corona crisis as well as possible, the industrial Mittelstand companies need state support in view of the current challenge: targeted, fast, unbureaucratic and practical.

You're asking for government assistance. What do you have in mind in particular?

The German government has understood that liquidity in companies is crucial. Simplified access to short-time work benefits is both right and important. It is intended to provide security for employees and their families and to relieve the burden on companies to a large extent. The Federal Government's planned financial emergency and aid programs are also a step in the right direction. In this context, it appears problematic that SMEs with more than ten employees can only obtain loans if they deposit full collateral with the bank. Politicians must quickly obtain practical assessments in order to be able to adjust in the interests of companies and workforces.

And beyond financial issues?

For example, it remains to be seen how Mittelstand companies will have to deal with deadlines and regulatory requirements. Mittelstand companies do not have their own staff or freelance specialists for this. In times like these, we hardly have anyone who can tackle all the current problems and, in addition, meet the bureaucratic requirements "just in time". But what happens if, for example, objection deadlines for tax issues or the application for exemption from the Renewable Energy Law levy are not submitted in time? Or if approval procedures stall due to a lack of staff in the relevant authorities and the cancellation of on-site inspections? What happens if expert examinations or audits, for example regarding environment or energy, cannot take place on site because nobody is allowed to travel? This requires responsible handling on the part of politics and authorities at federal, state and local level. Questions with high legal uncertainty tie up capacities. But we urgently need this capacity in order to be able to steer our companies through the crisis.

What else should politics do?

Many small and medium-sized enterprises are internationally active; we neither need nor want protectionism. It leads astray, nobody wins. Ultimately, current border closures endanger corporate value chains. If they break down, we will lose positive impulses from other regions and choke off the effects of recovery. We must prepare today everything that will help us out of the crisis tomorrow. Market and competition within the framework of the social market economy are also part of the solution to the crisis. The state can help in crises, but in the end, it is not the better entrepreneur. It is certain that, once the pandemic has abated, it must also be a matter of stimulating demand and quickly getting the economy back on track. Experience in China shows that this crisis will subside at some point. In Germany, the state should not insist too long on ensuring economic survival but should always keep an eye on when and how to switch to economic activation. If done correctly, this will help both companies and employees.

What about corporate solidarity in this special time?

Of course, solidarity between companies, sectors and regions can help. We have many positive experiences as business partners, suppliers and customers. At the same time, the relationship between the company and its principal bank is under pressure. This also applies to cooperation between companies in value-added networks. If banks are currently renegotiating or terminating existing loan agreements – worried about their own refinancing – companies and employees are endangered. A second wave of problems can then quickly arise on both sides. We should avoid this, not least in view of the current state aid measures. The significantly reduced risk of the house banks must now just as clearly increase the possibilities of the companies to get through the crisis. We are also currently hearing from small and medium-sized suppliers that large companies are pushing their homemade guidelines. There is an unannounced production stop, initiated orders are not corrected or are corrected late. Or financing systems and payment terms are questioned. These are all factors that can quickly raise existential questions for medium-sized family businesses. This is depressing – and the question arises as to how entrepreneurial families – even over generations – can keep the courage to continue their entrepreneurial activities. Living in solidarity, practicing fairness and remembering to work together successfully as respectable businesspeople – that would be good for everyone in challenging times. Because in the end, we can only be competitive on international markets by working together. This was true before the crisis, it is true during the crisis, and it will remain true after the crisis is over.