Schaeffler must tighten belt, cut jobs

September 09, 2020 // By Christoph Hammerschmidt
Schaeffler must tighten belt, cut jobs
The automotive crisis is hitting the supplier industry with force: After Continental and Hella, Schaeffler is now also announcing a tightening of structural measures - with job cuts well into the four-digit range. A new package of measures by the Executive Board is aimed primarily at reducing capacities and consolidating locations as well as strengthening competitiveness.

In view of the emerging technological and regulatory changes as well as customers' switch to electric drives, automotive and industrial supplier Schaeffler had already begun to adapt its European plant network in 2018 and to streamline its organization and focus it more strongly on the needs of the divisions. Against this background, the presence in the UK was reduced by three locations in November 2018. In addition, the RACE efficiency program was established in the Automotive OEM division in spring 2019, which was followed by other divisional programs in the course of the same year. Since then, three automotive sites in Germany have been sold as part of RACE. In addition, an additional program for voluntary job cuts was launched in September 2019 before the outbreak of the corona crisis and is currently being implemented.

Since the end of 2018, the number of employees in the Schaeffler Group has fallen by around 8,250 to 84,223 (June 2020), a reduction of almost 9 percent.

Despite a revival in demand in all divisions and regions in recent months, uncertainty about the further course of the pan-demic and the resulting deterioration in the economic situation remains high, according to the pessimistic assessment of the Schaeffler management. In addition, market and sales expectations for the time horizon up to 2025 point to a slow recovery, resulting in structural underutilization of production plants. The automotive sector in particular, which was already undergoing a structural change towards e-mobility, is being hit hard by the corona crisis. At minus 20 percent, the global production of vehicles expected for 2020 is significantly lower than in the previous year. The pre-crisis level is expected to be reached in 2024 at the earliest.

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