Looming layoffs
May 13, 2009
German auto parts manufaturer Schaeffler Group KG announced on Wednesday that it could axe up to 4,500 jobs in Germany as part of restructuing efforts to save 250 million euros (US$340 million) as the global economic crisis cuts deeply into auto sales.
Schaeffler said in a statement that it will try to avoid compulsory redundancies "as far as possible." Options included introducing short-time work, voluntary redundancies and partial retirement schemes, the Herzogenaurach-based company said in a corporate newsletter.
The workforce have also been informed about the Schaeffler rescue plan and declared their opposition to the planned job cuts. Schaeffler employs 28,000 people in Germany and 66,000 worldwide.
IG-Metall's Wolfgang Müller said negotiations with management would be "hard and fair" but at the moment there was no necessity for industrial action.
The Schweinfurt and Herzogenrach operations are likely to be hardest hit by the restructuring plans.
Poor sales figures
First-quarter financial results released on Wednesday were significantly lower than forecasted with sales down sharply for the current 2009 financial year.
For the year as a whole, Schaeffler forecast a 16 percent drop to 7.5 billion euros.
Schaeffler took control of Continental AG in January, creating one of the world's largest auto parts makers but ran up a huge debt to raise funds for its takeover bid for the German company, which is also facing heavy losses due to the downturn in the auto industry and global recession.
Government aid
In March, German Chancellor Angela Merkel's cabinet endorsed a 100-billion-euro government fund to aid struggling firms hit by the global economic downturn.
Economics Minister Karl-Theodor zu Guttenberg said that Schaeffler-Continental would be one of the first beneficiaries of the fund.
Schaeffler says it needs four billion euros in government aid. The state of Bavaria reportedly has signalled that it's willing to provide loan guarantees of 1.2 billion euros, but Premier Horst Seehofer stressed that they were not interested in a direct stake in Schaeffler.