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Historic German nutcracker maker files for bankruptcy just in time for Christmas

October 12, 2015, 10:02 PM UTC
Steinbach nutcrackers
Steinbach employees finish work on wooden nutcrackers in the production center in Hohenhameln, Germany, 13 November 2014. For more than 200 years Steinbach has been manufacturing wooden toys and nutcrackers. Ohoto: PETER STEFFEN/dpa Photo by: Peter Steffen/picture-alliance/dpa/AP Images
Photograph by Peter Steffen—Picture Alliance

Steinbach, one of Germany’s largest producers of handcrafted nutcrackers, has officially filed for bankruptcy, the Associated Press reports.

The 200-year-old company is based in Hohenhameln, a municipality in eastern Germany, and its hand-carved and hand-painted collectibles are particularly popular around Christmas time. Karla Steinbach, the sixth generation to run her family’s firm, attributes the unfortunate news to the country’s recent introduction of a minimum wage.

She told Hildesheimer Allegemeine newspaper, a German publication, that prior to the minimum wage she paid her employees between 5.50 and 6.50 euros per hour ($6.25 – $7.40). The new law, which went into effect on January 1 of this year, requires the company to pay its workers 8.50 euros an hour ($9.65).

Steinbach employs 120 workers. The company said its labor costs rose by 27%, and it simply couldn’t keep up with the extra expenses.

German Chancellor Angela Merkel called the increase a “painful” compromise, insisted upon by the center-left Social Democrats.