Economy & Politics

“The crisis has made the weaknesses more visible”

For the President of the Fedil, the pandemic has ultimately only accelerated restructuring. But if for René Winkin, the hospitality industry and the retail trade will be hit hard, the industry should not escape the phenomenon either. Explanations.

For the President of the Fedil, the pandemic has ultimately only accelerated restructuring. But if for René Winkin, the hospitality industry and the retail trade will be hit hard, the industry should not escape the phenomenon either. Explanations.

(ASdN with Thomas Klein) – So far, the industry has resisted the crisis. Despite the challenges of the pandemic, massive layoffs and bankruptcies are still rare. René Winkin, director of the Fedil, discusses the management of this crisis, the establishment policy and the creeping tax increases in an interview with our colleagues from the Luxemburger Wort.

As director of the Fedil, how do you see the past year?

“The situation is very heterogeneous in the manufacturing sector. In general, it can be said that the crisis has made the existing weaknesses more visible. Sectors that are undergoing structural change anyway, such as the automotive industry and its suppliers, have been hit harder by the crisis than others. The crisis ultimately only accelerated restructuring.

But it should not be forgotten that there are also industries which have weathered the crisis well or even benefited indirectly from it, such as IT service providers, the healthcare sector or manufacturers of protective clothing. Of course, all industries will have to see how the crisis and falling budgets affect demand in the long run.

In the spring, we feared a wave of insolvency in the fall. So far there has been no sign of this, do you think it will be next year?

“If there is to be one, it will most likely be in the hospitality and retail sectors. If the recovery does not materialize, restructuring will be inevitable. I don’t think we have yet reached the final social plans for this crisis. It is not excluded that the industry is also closing sites, but I do not think that there will be many bankruptcies in this sector in the country. In any case, the efforts of companies to make this socially acceptable are visible.

In recent months, social plans, production relocations and restructuring have been decided mainly in industrial companies. Does the crisis show that Luxembourg is too expensive for these manufacturing companies?

“Of course, high costs can be a problem. If you speak to a Belgian or French investor who wishes to come to Luxembourg, you must explain to him that the minimum wage here corresponds to the level of a teacher in these countries. It is always a global calculation with the companies to see if the reliability of the site, the availability of qualified personnel and the high productivity compensate for the higher labor costs. If you don’t really need it and can just as well produce your goods elsewhere, then you’ll think about it, especially in areas where automation is difficult to implement.


Wirtschaft, FEDIL President Michèle Detaille Foto: Anouk Antony / Luxemburger Wort

Following the failure of the Fage project, Michèle Detaille learns the lessons and wishes to avoid further dysfunctions. The president of the Fedil calls for “an ambitious industrial policy supported by all the players”.


How to ensure that the Luxembourg industry remains competitive?

“There are already some initiatives, such as the high performance computer, which will arrive in Luxembourg next year. Then, we proposed to build a technological park around Belval. We believe the university has developed well, now is the time to take the next big step. In a technological park, we could force cooperation between the university, the Luxembourg Institute of Science and Technology and industry.

Such measures could help companies based here to invest more in research or international groups to choose Luxembourg as a location for their development activities. It should not be forgotten that an important criterion which motivates companies to choose Luxembourg as their location is taxation. Luxembourg policy must therefore approach tax projects and decisions with caution. It is important not to throw the baby out with the bathwater in order to continue to attract sustainable and highly profitable industries.

Speaking of politics, beginDoes the industry assess the work of government in the current crisis?

“For us, it’s extremely important that the borders remain open – for our employees, for the products coming in, for the products going out. It must be said that the Luxembourg government managed this very well. It hasn’t always been easy. The good relations with our neighboring countries have also helped to create the conditions for teleworking in terms of taxation and social security.

On the other hand, it is unfortunate that some entire sectors were forced to close during containment. For example, craftsmen were no longer allowed to work outside their own workshops, so industrial companies were faced with the following question: who does my maintenance work, where can I find an electrician? If there is another containment, we will have to deal with it in a more differentiated way.


online.fr, FEDIL, President Michèle Detaille, Foto: Anouk Antony / Luxemburger Wort

She practiced it as a business manager, but it is as president of the Federation of Luxembourg Industrialists that Michèle Detaille urges the State to act to better organize professional activity at a distance.


In parallel with the pandemic, there is also the Brexit which is approaching. What will be its impact on the industry here?

“Trade policy is an important issue for us, and not just in relation to Brexit. For many of our members, the trade dispute with the United States or the dumping of prices from Asia is an even greater challenge. For us it is extremely important to keep international markets intact. Without globalization, the pandemic would have been an even greater disaster. Without it, we wouldn’t have been able to stock up on protective gear in a few weeks. The development of vaccines in such a short time would not have been possible either.

The state is currently spending a lot of money to mitigate the consequences of the crisis. Are you planning tax increases later to fund this?

“There are not 100 ways to balance the budget. Experience shows that it is difficult for policymakers to reduce social spending and operating costs. Either then you reduce investments, which can delay the modernization of the country. Either you increase your income. The planned tax reform has already been postponed for understandable reasons. But even without an increase in taxes, one thing must be understood: since Luxembourg joined various international tax harmonization initiatives, the tax base of companies increases every year because certain costs can no longer be amortized. “


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