U.S. takeover of German heat pump maker Viessmann sparks fears of key industry loss

The sale of German heat pump manufacturer Viessmann to U.S. air conditioner maker Carrier Global has sparked fears amongst German trade unionists and politicians over the loss of industries that are central to the country's energy transition plans. “Poor industrial policy decisions have already damaged an entire future industry, such as the solar industry and photovoltaics,” Jörg Köhlinger, district leader of trade union IG Metall, told Spiegel. The solar industry largely migrated to China after subsidies in Germany were removed about a decade ago. “This must not be repeated,” Köhlinger added. Economy minister Robert Habeck said it was important that Germany’s energy policy and the profits it generates continue to benefit the country as a business location. “We will pay attention to this,” he said, adding that the government is in discussion with both companies to ensure that the project helps the country’s economy. Finance minister Christian Lindner from the Free Democrats (FDP) said that the government must analyse the reason for the takeover carefully, Spiegel reports. It was a “pity” that an important and promising technology sector was being transferred to US hands, Christian Democrat (CDU) politician Julia Klöckner said.

Viessmann, which produces specialised air conditioning units and heat pumps, announced it would sell its ‘Climate Solutions’ business division for 12 billion euros to Carrier Global. For months the company had been trying to raise funds for investments for the ramp-up of heat pump production, according to Spiegel. The government is strongly promoting heat pumps in the move towards climate-friendly heating and aims to install 500,000 units per year in German homes from next year. The government coalition also recently agreed on a de-facto ban to the installation of new fossil fuel run heating systems from 2024, as most German homes are currently heated with gas boilers.

The German market for heat pumps is set to expand strongly, Jens Südekum, part of the economy ministry advisory board, said on Twitter. This means the market has become attractive to competitors, from example from Asia, he explained, adding that this would reduce profit margins as heat pumps become cheaper. “Viessmann has probably come to the conclusion that now is the optimal time to exit, as the market has not yet fully digested this dynamic.”