Thousands of Schaeffler jobs hit by weak auto and industrial units
German machine and car parts maker says it plans to lay off 4,700 people in Europe
05 November 2024 - 17:36
byAndrey Sychev
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Gdansk — German machine and car parts maker Schaeffler on Tuesday said it planned to lay off 4,700 people in Europe after its operating profit almost halved in the third quarter, highlighting challenges in the European automotive industry.
Its shares fell 4.7% by 11.20 GMT (1.20pm in SA) and are down more than 20% so far this year.
“Overall, a weak quarter and we expect further pressure on cash flow and balance sheet leverage going forward,” JPMorgan analysts said in a note to clients.
The European auto sector is facing multiple hurdles ranging from high production costs and managing the shift to electric vehicles to falling demand and rising competition from China.
Schaeffler said Germany would see the biggest staff reduction, with plans to lay off about 2,800 people at 10 sites.
The rest of the job cuts will span across five plants in Europe, including two site closures, Schaeffler added without naming the locations.
About 1,000 jobs will be reduced through displacements, bringing the net layoffs to 3,700 people, or 3.1% of Schaeffler’s total headcount that has increased after its merger with electric power train specialist Vitesco.
The German ball-bearings specialist expects to save about €290m a year by the end of 2029 through the efficiency plan, which will cost about €580m.
French tyre maker Michelin also announced job cuts and plant closures on Tuesday due to weak auto demand and cheap Asian competition. It plans to lay off 1,200 people and shut two plants in France by 2026.
Apart from the tepid automotive market, Schaeffler was hit by falling sales in its industrial business, which makes components for wind turbines and industrial robots, in the third quarter.
It saw weak demand and cheaper competition in China’s wind energy market in particular.
As a result of weak demand for factory robots, Schaeffler said it would put its industrial robotics site Melior Motion up for sale.
It will relocate operations of another industrial automation site, Ewellix, to its plant in Schweinfurt, and close Ewellix’s Taiwan factory.
Schaeffler had bought the Melior Motion and Ewellix sites only two years earlier.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Thousands of Schaeffler jobs hit by weak auto and industrial units
German machine and car parts maker says it plans to lay off 4,700 people in Europe
Gdansk — German machine and car parts maker Schaeffler on Tuesday said it planned to lay off 4,700 people in Europe after its operating profit almost halved in the third quarter, highlighting challenges in the European automotive industry.
Its shares fell 4.7% by 11.20 GMT (1.20pm in SA) and are down more than 20% so far this year.
“Overall, a weak quarter and we expect further pressure on cash flow and balance sheet leverage going forward,” JPMorgan analysts said in a note to clients.
The European auto sector is facing multiple hurdles ranging from high production costs and managing the shift to electric vehicles to falling demand and rising competition from China.
Schaeffler said Germany would see the biggest staff reduction, with plans to lay off about 2,800 people at 10 sites.
The rest of the job cuts will span across five plants in Europe, including two site closures, Schaeffler added without naming the locations.
About 1,000 jobs will be reduced through displacements, bringing the net layoffs to 3,700 people, or 3.1% of Schaeffler’s total headcount that has increased after its merger with electric power train specialist Vitesco.
The German ball-bearings specialist expects to save about €290m a year by the end of 2029 through the efficiency plan, which will cost about €580m.
French tyre maker Michelin also announced job cuts and plant closures on Tuesday due to weak auto demand and cheap Asian competition. It plans to lay off 1,200 people and shut two plants in France by 2026.
Apart from the tepid automotive market, Schaeffler was hit by falling sales in its industrial business, which makes components for wind turbines and industrial robots, in the third quarter.
It saw weak demand and cheaper competition in China’s wind energy market in particular.
As a result of weak demand for factory robots, Schaeffler said it would put its industrial robotics site Melior Motion up for sale.
It will relocate operations of another industrial automation site, Ewellix, to its plant in Schweinfurt, and close Ewellix’s Taiwan factory.
Schaeffler had bought the Melior Motion and Ewellix sites only two years earlier.
Reuters
VW faces strikes over plant closures as profits plunge
German workers stage nationwide strikes
Fraud trial of former VW chief Winterkorn suspended due to poor health
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Related Articles
Strike ends as workers accept Boeing’s contract offer
SAB shines in AB InBev’s third quarter
Chinese EV maker BYD beats Tesla for first time in revenue
Olympus CEO steps down after allegations of illegal drug purchase
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.