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Business

Winter weather freezes business in Germany

Several days of snow and ice have proven to be a headache for German companies. Blocked freeways have cut off supply lines for car manufacturers, gas stations and delivery companies.

Two hands holding road salt

Business is good - if you're a road salt producer

In snow-covered Germany, trying to get around on streets that haven't been salted is next to impossible, and road salt company K + S is benefitting from the increase in demand. Their stock on the German exchange DAX has risen significantly in the last few days.

In other branches of the economy, however, the hard winter is turning into a serious problem.

"Production in the German construction industry is at a standstill," said Heiko Stiepelmann from a building industry group. Excavation, road works, and building construction have especially taken a hit."

The construction industry is facing its second battle with winter weather in 2010. In the first three months of the year the sector was faced with similar problems of snow and ice.

"If it repeats itself at the end of the year, we'll hardly be able to record a profit," said Stiepelmann.

Economy remains thawed

The construction industry isn't alone in feeling the sting of the cold and snowy weather. Companies are postponing business trips. Restaurants and stores are suffering as customers find it difficult to get around.

People crossing a snowy street

Fewer shoppers are braving the weather

"The harsh and early winter is stunting economic growth at the end of the year," said Volker Treier, lead economist of the German Chamber of Commerce.

Last winter cost economic growth a half percentage point, and Treier says this winter is pushing things in a similar direction.

"But the general economic boom is too strong to be held back by a hard winter," he added.

Car problems

The Ford car factory in Cologne was another victim of the winter conditions. Production was stopped last week because a delivery of heaters couldn't be made on time.

"The heaters are from a factory in northern France, but France and Belgium closed the freeways for semi-trucks that weighed more than seven and a half tons," said Bernd Meier, Ford's press officer at the factory in Cologne.

Cars stuck in traffic on a snowy freeway

Many deliveries didn't even make it to the freeway

The Opel factory in Bochum faced shortages of certain car parts, but the finished cars could still be completed on time.

Blocked or closed highways have limited deliveries of fuel to gas stations, leading to a shortage in some parts of Germany.

The oil company Esso reported that 20 German gas stations were completely out of gas. Icy roads kept fuel trucks from leaving at Shell oil refineries.

Race against the clock

The timing of this particular cold snap is especially problematic for logistics companies hoping to deliver Christmas presents on time.

Snow-covered gifts

Getting gifts delivered on time could be a challenge

Christine Hoeger, a spokeswoman for the online shopping portal Amazon, said delivery of packages could be delayed by up to two days.

DHL was a little more optimistic for its Christmas deliveries.

"We're assuming that we can deliver all packages that reach us by midday on December 22 on time for Christmas," said Claus Korfmacher, a DHL spokesman in Bonn.

Despite the guarantee, getting presents under the Christmas tree on time this year in Germany could prove to be a challenge.

Author: Alexandra Scherle (mz)
Editor: Nancy Isenson

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