Since the start of its downfall in 2004, the company has experienced mostly setbacks. This continued in 2009 with an estimated loss of around 52 Million Euros, as reported by Manager Magazine. While the Schlecker CEO (Anton Schlecker) declined to comment on this figure, it is clear to all that the drug store is indeed in need of restructuring.

This restructuring will likely entail the creation of more Schlecker “Super Stores”, 250 of which have already been established. This model, adopted from the US, has apparently already proven efficient in Germany’s drug-store market. Schlecker has promised that the investments needed for the creation of these superstores are in a manageable range for the chain and Anton Schlecker has even stated the equivalent of “We are going to invest big bucks.”

The recent criticism aimed at Schlecker’s hiring of underpaid workers from the Meniar corporation in order to cut costs was also addressed by Anton Schlecker who noted that “Meniar is only cutting the peaks” and is only providing a small part of Schlecker’s 52,000 employees. Due to increasing political pressure, however, Schlecker has decided to terminate its contract with Meniar, stating that even though Schlecker has technically done nothing wrong, the public image in this regard must change. This seems a wise decision, considering the claims that the average hourly wage of such outsourced employees was around 6.50 Euros.

Steinmeier expects to generate a job boom by promoting information and communication technology in Germany and thereby placing Germany at eye’s level with the United States in regard to software production. Steinmeier believes that advances in the IT sector should help to create two million jobs in industry. To achieve these goals, Steinmeier proposed the creation of “software schools” which would focus on the education of programmers and software engineers and noted that more women need to be inspired to take on IT jobs.

Steinmeier also announced a plan to promote the foundation of small and medium-sized businesses by introducing special risk-capital pool and research programs. Steinmeier believes that “a new foundation wave in Germany” is possible which he plans to support with a EUR 1.4 billion (approx. USD 1.9 billion) tax credit program. He also expressed the wish that most of the new jobs created in the industry sector be based on “green” technology such as electric cars as well as an „efficiency revolution“ in all industry areas. In the service sector Steinmeier would rely on the health-care industry and announced a one-million-jobs program for health care and medicine technology if elected chancellor.

Steinmeier declared that while he could not promise the creation of four million jobs, he believes his concept is realistic and can be effective in the fight against unemployment. Emanuele Gatti, a board member of Fresenius Medical Care, one of the world’s largest producers of medical equipment, welcomed Steinmeier’s plan, noting that “Germany is an ideal location for medicine technology”. Also the employer-friendly “German Institute of the Economy”, a private economic research organization, complimented Steinmeier’s proposals as ambitious but possible.

Germany’s two largest car parts suppliers seem to be heading for a showdown. It recently became public that Continental’s banks want to stop merger talks with Schaeffler in order to gain more control of the company through a capital increase. The move is seen as an assault on Conti’s majority shareholder, Schaeffler, which acquired a stake of more than 90 % in its larger rival a year ago. In the case of a capital increase, Schaeffler’s share could be cut back to 60 %.

Analysts have urged Conti to strengthen its debt-saddled balance sheet and voiced skepticism that the company would be able to pay back the portion of the debt due to mature next year.
In the meantime, the Schaeffler family is in danger of losing ownership of the Schaeffler Company to its banks due to the company’s debt load of EUR 11 billion (approx. USD 14.5 billion) which it amassed during the takeover process.

The debt-ridden sports car maker Porsche scheduled an extraordinary supervisory board meeting for 23 July 2009 to debate two rival rescue plans for the company: either a possible investment by the Qatar Investment Authority or the sale of a 49 % stake in Porsche to Volkswagen.

The move came after Porsche CEO Wendelin Wiedeking agreed with Qatar on an outline plan under which the emirate would buy a stake in the Porsche holding company, including a package of options which could be converted into Volkswagen shares at some future time. An investment by Qatar would represent a milestone for Porsche, since a sale to an outside investor has always been considered a taboo for the company.

The other alternative would be a sale of 49% of Porsche to Volkswagen. Porsche desperately needs a large cash inflow to ease financial difficulties which arose after a conflict-ridden attempted takeover of a 50.76 % stake in Volkswagen left Porsche with a net debt burden exceeding EUR 9 billion (approx. USD 12.5 billion).

Which option will be chosen will again generally depend on the outcome of the power struggle between Wolfgang Porsche and Ferdinand Piëch. Sources close to the families have also indicated that it is far from given that the owners will reach any decision at all at the supervisory board meeting.

Yesterday, the German economics ministry reported a growth in orders for German industry of a surprising 4.4 % in May 2009 over April 2009. Steel industry companies and medium-sized entities are also in a good mood at the moment. The job market and state budgets, however, remain problematic.

While orders from inside Germany grew by 3.9 % compared to April, foreign orders grew by 5.2 %, with those from outside the European Union growing the strongest at 8.2 %. In April, orders had grown at a mere 0.1 % compared to the previous month and the expectation for May was only 0.8 %. Steel production is currently showing the strongest growth (15.7 %) followed by the auto industry (9.8 %). Compared to 2008, however, orders are still around one-third lower on average.

Medium-sized entities, the backbone of the German economy, are also reporting an improved business climate, although, as the KfW and the Ifo Institute have pointed out, this is mainly due to good expectations for the upcoming six months, which is one factor questioned in the business climate survey.

Although the German Constitutional Court rejected the claims challenging the constitutionality of the Lisbon Treaty, it suspended the treaty’s ratification until the German parliament passes the ratification law amending various aspects of the German constitution to give legislative jurisdiction to the EU in the matters called for by the Lisbon Treaty. The Federal Constitutional Court’s vice president told the Financial Times that the court is “confident that this last hurdle before the submission of the ratification instrument can be overcome quickly.”

Germany is obliged to ratify the treaty before 2010 and the government is now confident that all necessary amendments to the ratification law will be passed in time. Final approval should take place on September 8. However, the governing Grand Coalition cannot pass the bill without the support from at least parts of the opposition since the bill requires a two-thirds majority in both houses of parliament. It therrefore now seems to depend on the opposition whether or not the amendments will be enacted and the ratification act passed before the federal election of September 27.

The Federal Statistic Office’s representatives told media that they could not recall a comparable quarterly downturn during the past few decades. Exports were down 20.7 % in January and 23.1 % in February with the decline slowing in March to 15.8 %. Any hopes created by this somewhat lower March decline were dashed in April when exports fill a whopping 28.7 %.

The largest downturns in the first quarter of 2009 were measured for exports to Turkey (38.7 %) and Russia (31.4 %), while exports to China remained relatively stable. Exports to the United States declined by 26.4 %, which is slightly above average. Imports from the US, on the other hand, increased by 4.7 %. Given these current figures, experts are uncertain about expectations for 2010.

Deutsche Bank recently answered a catalogue of questions posed by the data-protection authorities of the Federal State of Hessen, where its headquarters is located, handing in a 9-page paper in response to accusations that it spied on members of both its board of directors and its supervisory board.

Deutsche Bank had previously admitted having problems in its company group security which led to the surveillance of a member of the board of directors, a member of the supervisory board as well as further managers and their families.

A second problem currently confronting Deutsche Bank is investigations being conducted by the Federal Financial Supervisory Authority (BaFin) into Deutsch Bank’s alleged non-fulfilment of various reporting and monitoring obligations. The German Business Daily Handelsblatt reported in its 16 June 2009 issue that this special investigation might eclipse the data scandal since Deutsche Bank is alleged to also have infringed its reporting obligations with regard to its foreign participations.

Although many believe that compliance should take a back seat to economic advancement during the current crisis situation, obviously the German public institutions are not willing to provide a grace period with regard to corporate compliance infringements.

The German Economic Minister, Theodor zu Guttenberg, told media on Monday that the German government would be careful in handing out state aid if not even the company’s owners were convinced of the company’s chances at recovery. However, the government had given Arcandor a last chance to improve its request for a short-term loan from the state by getting shareholders, creditors and landlords to put up more of their own money to help rescue the company.

Arcandor met with its main investors, banks, and the owners of its retail properties on Tuesday, but could not reach a resolution which would have provided an alternative to insolvency.

The decision opens the way for Arcandor’s German competitors Metro Group, Otto, and Rewe to carve up important parts of the business, although job losses among Arcandor’s German workforce of more than 50,000 people are still likely to be significant.

The election is, however, not without a certain aftertaste: In the German Parliament, an inquiry has been intitiated in regard to the so-called “Twitter-affair” in which several members of parliament leaked the result of last Saturday’s presidential election via the micro-blogging service Twitter almost fifteen minutes before the result was officially announced. The involved MPs have reacted differently with one resigning from her office as the Parliament’s recording clerk, while another argues that the Parliament’s views are technologically old-fashioned.