Evidence of a continuing and deepening crisis in the crane hire sector in eastern Germany comes with the news that Krantechnik Erfurt (KTE) and Kran & Transport Dresden (KTD) have gone out of business. Their collapse in August came just weeks after the failure of Attollo Maximum.

KTE and KTD, officially not connected but originally part of the same corporate group, had more than 70 cranes between them. Liebherr stepped in to buy the cranes and has since sold them on to a leading Dutch trading company.

Liebherr was also instrumental in trying to maintain market stability after the collapse of Attollo Maximum which had about 130 cranes, mostly Liebherrs. Berlin hire firm Grohmann bought a lot of the equipment and took over the depots in Kiel, Rostock, Hamburg and Berlin, which are now operating under the Attollo name.

Other Attollo cranes were taken back by Liebherr, with whom Attollo had a leasing agreement.

Attollo Maximum, owned by Osbert Döhl, fell victim to depressed rental rates and a failed bid to enter the Scandinavian market, starting in Denmark where rates where 30% higher than in Germany. But as soon as Attollo arrived, Danish competitors slashed their rates and the German newcomer failed to get a foothold.

The opinion of many in the German crane industry is that other companies also have financial difficulties and more failures can be expected. “If you ask me, there are too many cranes in the east,” said Friedrich Bär, managing director of manufacturer Liebherr-Werk Ehingen.

Problems can be traced back to the construction boom following reunification of Germany – which saw a massive influx of equipment into the east – the subsequent downturn and the collapse of the Breuer crane hire empire. Breuer Maximum had more than 700 mobile cranes before its break up in 1998. Many of these crane remain in the hands of spin-off companies. Attollo Maximum itself was created from the break up of Breuer.

Budding entrepreneurs were encouraged to set up crane hire companies in the east by investment grants from the government and buy-back guarantees from crane manufacturers.

But the banks are now said to be losing patience with the crane hire industry. Buy-back guarantees ensure they can at least get some money back from businesses which they have financed, so they are increasingly reluctant to let companies attempt to trade their way out of trouble, choosing instead to close them down.

In spite of problems in the east, registrations of AT cranes in Germany were up 17% in 1999 and up a further 8% in the first five months of 2000, year on year. (For more details see Sales still rising, pp38-39.)