Kurzarbeit In Practice

How a venerable German company used the government’s furlough program to maintain production and retain its workforce

 February, 2021

The 100-year-old precision engineering firm SchuF, based near Frankfurt, specializes in manufacturing valves for petrochemical companies and other firms. As well as in Germany, the company currently has plants in Ireland, the US, the UK, Italy and India, and exports to markets on every continent – which means a shortfall in one can often be made up in another.

But neither that nor the relative stability of the petrochemicals sector could fully insulate SchuF from the effects of a global pandemic. In spring 2020, CEO Dr. Martin Frank found himself staring at a downhill trend, with sales worldwide dropping 30 percent.

© Gaby Gerster/laif

He decided to take advantage of one of the options in Germany’s pandemic toolbox: the Kurzarbeit program – where the German government pays a minimum of 60 percent of the net income of employees for the period there is no work for them to do. “I think German Kurzarbeit is very solidly balanced because it doesn’t go overboard,” Frank says. “Sixty percent is a great deal, but not one where you’d want to be not working for too long.” Governmental payroll support for employees whose services were temporarily no longer needed meant the company didn’t have to lay off anyone.