In light of a changed market environment and accelerating change in the field of drive technologies, the executive board of automotive supplier Schaeffler AG has decided on structural measures to further improve the competitiveness of the Automotive Technologies division and reduce both fixed costs and excess capacity. About 1300 jobs will be lost due to these measures.
The transformation of vehicle powertrains towards electric mobility, which Schaeffler says is progressing faster than expected, is leading to overcapacities in products for vehicles with combustion engines and thus to a further need for adjustment, the company announced. One of the most important factors here is that car manufacturers are continuously reducing their development activities for internal combustion engines, which also requires Schaeffler to make adjustments. In addition, the company adds in a press release, it is striving to make internal structures more efficient, both in manufacturing and in central functions, in order to reduce fixed costs and make internal processes as lean as possible.
On this basis, the measures now announced include a total of 1,300 job cuts, particularly in the Engine/Transmission Systems and Bearings divisions of the Automotive Technologies division as well as within the company’s central functions. Just under three quarters of the capacity reductions are in administration and central functions in the area of research and development for internal combustion engines, the remainder in production. The job cuts affect both Germany and abroad. In Germany, the Herzogenaurach, Bühl and Homburg sites are mainly affected. Every fourth job affected is located outside Germany. “The measures defined by the Board of Managing Directors represent a concrete contribution to securing future growth in order to further strengthen Schaeffler’s competitiveness and future viability in the long term and, at the same time, to preserve jobs in Germany in the long term,” says Sascha Zaps, Regional CEO Europe of Schaeffler AG. With these measures, the company aims to save up to €100 million annually. However, this will be offset by transformation expenses of around €130 million, the majority of which is expected to be recognised as a provision in Q4 2022.
In Schaeffler’s E-Mobility division, efficiency in prototype construction is to be further improved, which will require adjustments in Bühl and Herzogenaurach. At the Homburg location, the focus of the planned measures is on competitive production: Increasing automation on the one hand and more efficient internal structures and processes in production on the other are intended to reduce jobs here.
At the Ingolstadt and Morbach locations, Schaeffler exclusively manufactures components for vehicles with internal combustion engines, which are affected by declining demand. In the coming months, location concepts will be developed here together with employee representatives as part of newly designed dialogue processes.
At the same time, the company wants to strengthen the German sites affected by the capacity reduction by investing in new technologies: In Herzogenaurach, in addition to the central laboratory already under construction, hydrogen activities are to be expanded and the corresponding competence centre further developed. Furthermore, components and systems for e-mobility are to be increasingly developed at this location, and new digitalisation and automation technologies will be rolled out. At the Bühl location, Schaeffler is expanding its development and manufacturing campus for e-mobility and converting the plant into the global lead plant for e-motor production. A centre of excellence for rolling elements for the Automotive Technologies division is being built at the Homburg campus. To this end, Schaeffler is investing in digitalisation and automation on site.
“In the future, it will not be enough just to be a technological leader. Rather, competitive cost structures are crucial in order to further accelerate the transformation and consistently align Schaeffler with the electrification of the powertrain. Conversely, this also means reducing the cost base and eliminating excess capacity,” commented Matthias Zink, CEO of Schaeffler’s Automotive Technologies division.
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