Mahle headquarters
StuttgartMahle CEO Jörg Stratmann is now taking firm action in his austerity program: the fourth-largest German automotive supplier plans to phase out the facility in Öhringen by the end of 2020.
So far, 240 employees have been manufacturing air management systems for internal combustion engines there. The plant has been under price pressure for a long time and is also a first victim of the company’s stronger focus on electric mobility.
“We have now reached a point at which the plant unfortunately no sustainable perspective is given,” says Mahle CEO Wilhelm Emperhoff. A few years ago there were still 450 people employed there. According to the company, no new or alternative projects could be won for the location.
Due to the high costs of the transformation in the automotive industry, the further weakening of the economy and a decline in demand for diesel vehicles, Mahle relies on even more profitable and sustainable locations in a challenging competitive environment, emphasized Emperhoff. Mahle now wants to seek in the negotiations with the employees for a socially acceptable solution and bring a qualification society into play.
The closure of the Öhringer plant goes beyond the austerity program that had been announced in mid-May by Mahle chief Stratmann, who had been in office for 16 months. The 49-year-old industrial engineer had already announced a total of 380 out of a total of 4,300 jobs outside production in the Stuttgart area, He also put the large project for expansion of the headquarters in Bad Cannstatt on hold.
“To put it bluntly, 2019 will be a challenging year,” Stratmann announced at the balance sheet presentation. At risk are the 750 temporary jobs in production. IG Metall is already negotiating a site-securing contract, which excludes Öhringen.
Above all, a recent weakening of the market in China, falling market shares in diesel and the global uncertainty caused by smoldering trade conflicts make the automotive supplier to create, as well as many others in the industry. Stratmann had therefore announced in March to cut costs in order to make investments in new business and remain profitable.
Because strategically Mahle is in a difficult situation: Founded in 1920 and grown up with pistons and engine parts Foundation company makes for some years tremendous efforts to become less dependent on the internal combustion engine with acquisitions. Above all, the purchase of the radiator specialist Behr nine years ago proves to be a stroke of luck, because even electric cars need air conditioning and the batteries must be cooled.
Mahle has just built a new plant for electric air compressors that can be used for air conditioning systems of electric cars as well as for vehicles with burners. But buying additional electronics and software skills costs a lot of money. Accordingly, Stratmann must now be elsewhere.
Because the market will not help: After the slight decline in sales in 2018 to 12.6 billion euros, it will be difficult not to shrink further. The profit quadrupled to 446 million euros. But that was mainly due to the sale of Hella Behr Plastic Omnium. Further sales are not planned. The austerity program should now provide the full relief.
More: The automotive supplier must save. For this he skims almost every tenth position at the headquarters. This is also responsible for the weakening China business.
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