Automotive industry in crisis

Supplier Schaeffler plans to cut 4700 jobs

The Schaeffler headquarters in Herzogenaurach

(Bild: APA/AFP/Tobias SCHWARZ)

The crisis in the European automotive industry continues to spread. Following the gloomy cost-cutting announcements by Volkswagen and other companies in the sector, the supplier Schaeffler has now also announced that it will be cutting 4700 jobs in Europe, 2800 of them in Germany. 

The extent to which Schaeffler Austria, with around 466 employees and a production facility in Berndorf, is affected was still unclear on Tuesday morning. The company, which employs 120,000 people worldwide following the merger with competitor Vitesco, announced at its headquarters in Herzogenaurach, Franconia, that ten locations in Germany and five others in Europe would be affected. Two of the five European sites are to be closed completely. The package of measures will be implemented between 2025 and 2027. The aim is to save 290 million euros per year from 2029, it said.

Company promises measures "with a sense of proportion"
"The program is necessary in the current environment in order to secure the Schaeffler Group's long-term competitiveness. We will implement it in a socially responsible manner and with a sense of proportion," said Schaeffler CEO Klaus Rosenfeld. "If you delay structural adjustments - as you can see with others - you will be forced to take radical measures later," Rosenfeld continued.

Some jobs are "only" to be relocated
The announced headcount reduction corresponds to around 3.1 percent of the total workforce. However, some jobs will also be relocated within Europe or to non-European countries, meaning that Schaeffler is talking about a net reduction of 3700 jobs. Employee representatives reacted angrily and called for alternatives to be explored. CEO Rosenfeld emphasized: "There are no alternatives.

There are three main reasons behind the plans: The business with bearings for wind turbines, for example, is sluggish - due to competition from China. "The Chinese are attacking in the wind sector," said Rosenfeld. The transformation of the automotive industry towards e-mobility is progressing more slowly than planned. "The reduction of around 600 jobs is due to cost synergies from the merger with Vitesco," said Rosenfeld. Schaeffler acquired the electric drive specialist from Regensburg just a few weeks ago, making it one of the world's ten largest companies in the supplier industry with a total of around 120,000 employees.

At present, hardly a day goes by without new bad news from the industry, which is important for both Germany and Austria. It was recently announced that Audi will be closing its plant in Brussels next year. Thousands of employees are affected and are rebelling (see picture below). The parent company Volkswagen is planning further plant closures and thus the loss of many more workers.

Burning protest in front of the Audi plant in Brussels

(Bild: APA/AFP/Belga/JONAS ROOSENS)

Those employees who are not affected by the job cuts are likely to earn significantly less in future. According to the works council, income cuts of up to 18 percent are planned. Four billion euros are to be saved in this way.

The Schaeffler headquarters in Herzogenaurach

(Bild: APA/AFP/Tobias SCHWARZ)

Austrian companies are also trembling
Austrian companies are also trembling, as 900 companies produce for the automotive industry. VOEST, ZKW and Miba, for example, count the Volkswagen Group among their customers. 300 companies in Austria are even pure vehicle suppliers. Over 200,000 people work in this sector.