ARQUES (France) — Arc International has been the largest producer of glass tableware in the world for many years thanks to cheap energy. It is a vital employer in northern France’s working-class region.
The business has been flooded with new risks by Russia’s sudden cutoff of gas from Europe. Arc’s chief executive Nicholas Hodler had to revise business forecasts six times in a matter of two months because energy prices have risen so quickly that he was forced to cut off gas from Russia.
To save money, he recently put a third (of the 4,500 employees) on partial furlough. Four furnaces in the factory will be shut down; the rest will switch from natural gas to gasoline, which is cheaper but also more polluting.
“It’s one of the most difficult situations we have ever faced,” said Mr. Hodler, shouting over the noise of the factory floor workers clinking glasses. It’s devastating for energy-intensive companies like ours.
Arc isn’t the only one. High energy prices have smashed European industry. This has forced factories to reduce production and furlough tens of thousands of workers. Although these cuts are temporary, they raise the risk of Europe experiencing a severe recession. The euro area’s industrial production fell by 2.3 percent in July compared to a year ago. This is the largest drop in over two years.