voestalpine is bracing itself against a persistent economic downturn and the car crisis. “We are certainly in a very weak environment – there is a subdued economic mood worldwide,” said CEO Herbert Eibensteiner on Wednesday at the Business Journalists’ Club in Vienna. Europe is a particularly weak market. In his opinion, politicians are required to set the right course here.
“We cannot expect any immediate improvement in the economic situation,” said the boss of one of the largest domestic industrial companies. voestalpine has also made people sit up and take notice this year with profit warnings and significant drops in earnings – voestalpine reduced its profit expectations (before interest, taxes, depreciation and amortization) for the current 2024/25 financial year (as of the end of March) to 1.4 billion euros in October In August, 1.7 billion euros were still expected, meaning a value at the previous year’s level. In the first half of the financial year, profit after taxes fell from 321 to 183 million euros compared to the same period last year – a decline of 43 percent. “The international positioning in different industries and geographical markets stabilizes our consolidated results,” emphasized Eibensteiner.
High energy and personnel costs are a hurdle
The high personnel costs and the major issue of energy costs are problematic for voestalpine in Austria. The latter especially with a view to the transformation towards climate-neutral steel production. To do this, Voest Blast Furnaces is converting to electrical operation and for this it needs the appropriate infrastructure and economically viable energy prices. “We will have increasing energy needs,” it is clear to Eibensteiner. “After 2030 we will need additional electricity for decarbonization.”
According to Eibensteiner, it would be important for Europe’s future and competitiveness that domestic politics also take shape. The new EU Commission under Commission President Ursula von der Leyen, which was confirmed today in Strasbourg and can start work on December 1st, will use the first 100 days to concentrate on the “Clean Industrial Deal”. “The governments of the European countries have to be involved and it is important that the Austrian government is actively involved,” emphasized the company leader, referring to a location policy that is positive for Austria. His approach: “Down with labor costs and we have to find a solution to the high energy costs.” Eibensteiner hopes that a new government (in Austria, note) “will have a sufficient supply of experts.” “The government can think about which activities are driving inflation.”
Europe must make “relevant trade policy”.
The international trading environment is changing. “If other importing nations lock themselves down, trade flows go to where it is easiest,” said Eibensteiner. “The Chinese will isolate themselves, the USA will isolate themselves and the real problem is that the EU cannot counteract this,” says the voestalpine boss. “I believe it is important to strengthen Europe.” Europe must also make “a relevant trade policy”. “We are geopolitically irrelevant and do not make trade policy – that is what makes Europe weak,” said the voestalpine boss. “We are a big market, but we also have to take this into our own hands.”
The tariffs are “just one of the issues”. “The important thing is that we have now established that the framework conditions for the transformation – such as sufficient available renewable energy – do not exist,” said Eibensteiner. “These are all signs that we cannot achieve this in this time.” In his opinion, a revision of the European Carbon Border Adjustment Mechanism (CBAM) would be “important”. Furthermore, “the markets in Europe where necessary must be protected”. And thirdly, we have to get rid of this excessive bureaucracy.
“We have no relaxation in protectionism, we have over 4,000 more trade restrictions worldwide every year – not just tariffs – and protectionism will not decrease,” expects Eibensteiner. Just this week, US President-elect Donald Trump announced additional tariffs on goods from Canada, Mexico and China. voestalpine’s answer to increasing protectionism: produce “locally for local”, i.e. with plants on site in the country in which the respective buyers of Voest products have their factories.
## Interview with Herbert Eibensteiner, CEO of voestalpine
**Interviewer:** Mr. Eibensteiner, thank you for joining us today. voestalpine is facing a challenging economic climate, marked by a downturn and a crisis in the car industry. What is your outlook for the company in the near future?
**Eibensteiner:** We are certainly navigating a tough environment. The global economy is subdued, with Europe particularly weak. We don’t expect immediate improvement [[1](https://www.voestalpine.com/group/de/media/presseaussendungen/2023-08-29-voestalpine-ag-ceo-herbert-eibensteiner-bleibt-fuer-weitere-fuenf-jahre-vorstandsvorsitzender/)].
However, voestalpine has a strong international presence across different industries, which provides us with some stability. Our strategy is focused on long-term sustainability, digitalization, and diversity.
**Interviewer:** You mentioned high energy costs as a challenge. How is voestalpine addressing the transition to climate-neutral steel production amid rising costs?
**Eibensteiner:** This is a major challenge for us, especially in Austria. Transforming our blast furnaces to electric operation requires significant investment in infrastructure. We need reliable and economically viable energy prices to make this happen. The reality is, our energy needs will increase after 2030 as we decarbonize.[[[[
Government policy will play a critical role in creating the right environment for this transformation.
**Interviewer:** What specific steps are needed from the Austrian government to support the industry’s transition to a more sustainable future?
**Eibensteiner:** We need a positive location policy that addresses both labor costs and energy prices. We saw recent promising developments with the new EU Commission emphasizing a “Clean Industrial Deal” and the need for member states to be actively involved. Austria needs a new government with the necessary expertise to develop solutions for these challenges.
We also need to acknowledge that current trade policies are making things more difficult. The EU needs to become more assertive in international trade and strengthen its own position.
**Interviewer:** Mr. Eibensteiner, thank you for sharing your insights.
