Swiss steel industry struggles: government refuses financial aid

The Swiss steel industry faces a severe crisis. An investigation by Swiss public television, RTS, reveals that Switzerland's last two steelworks are encountering significant financial challenges. Despite repeated appeals to the Confederation for assistance, the Swiss government remains unresponsive to requests for support.

In canton Solothurn, Stahl Gerlafingen has recently announced the closure of one of its two production lines, jeopardising around a hundred jobs. Upon leaving the factory, workers expressed little surprise.

“We’ll miss the team, but our debts are so overwhelming that we have no other option,” says Savo Rakitić, a worker at the company.

Rising energy prices exacerbate the situation. In canton Lucerne, the other Swiss steelworks, Swiss Steel Group, employing 10,000 workers, faces similar challenges. To survive, the manufacturer seeks to inject €300 million (CHF295 million) in new funding.

According to Swissmem, the industry’s umbrella organisation, several factors contribute to this downturn. “Foreign countries provided massive support to their steelworks during the surge in energy prices, unlike Switzerland. Additionally, the European Union (EU) and the United States are partially closing their steel markets, making it difficult for our companies to supply them. Moreover, over the past two years, the strong franc has compounded the issue,” explains Jean-Philippe Kohl, Vice-Director of Swissmem.

Highly responsive companies like Favre SA in Corcelles-près-Payerne depend on Swiss steel. Half of the steel used by Favre SA, specialising in the shaping and sale of reinforcing steel, originates from Switzerland. This metal is shaped before delivery to construction sites in French-speaking Switzerland. The company relies on its Swiss supplier due to its quick turnaround.

“Stahl Gerlafingen maintains stock and is highly responsive. It can deliver to us within two days, unlike European industries where waiting times can extend up to a week,” highlights Sébastien Banderet, Director of Favre SA.

espite recognising the importance of the Swiss steel industry, the Swiss Confederation declines financial support. The State Secretariat for Economic Affairs responded to RTS in writing: “Switzerland will not support such measures as they are costly and do not ensure long-term competitiveness.” This decision baffles the unions, who believe these manufacturers are of systemic importance to Switzerland. “Here in Stahl Gerlafingen, we have the largest recycling plant in Switzerland. We produce steel from scrap metal,” explains Markus Baumann, trade union secretary of the canton Solothurn branch of Unia.