Voestalpine AG (VLPNY.PK), an Austrian steel-based technology group, announced Friday that it is reorganizing its Automotive Components business in Germany, including the closure of Birkenfeld plant, which will impact 220 employees.
In addition, around a third of the current workforce of 650 employees in the Dettingen location could be affected as the reorganization program involves focusing on a specific technology.
The Dettingen location, which develops and produces ready-to-install stamped and formed parts, complex assemblies as well as safety and impact protection components for automotive manufacturers, will in future increasingly focus on assembly.
The move is part of Metal Forming Division's efforts to face the structural changes and falling customer demand in the automotive sector.
In future, the company's other four plants in Germany will form a joint production network, with each contributing their specialist technology and product knowledge.
Operations in Birkenfeld will be discontinued subject to the outcome of negotiations with the Works Council and IG Metall. voestalpine Automotive Components Birkenfeld produces ready-to-install stamped and formed steel and aluminum parts for the automotive industry. Its earnings have been negative for several years.
According to the company, the long-term slowing in the macroeconomic environment and associated drop in orders from the automotive industry in the specific product segment mean that it is no longer financially feasible to continue operations at the location.
The company noted that over the coming weeks, extensive discussions will be held with IG Metall and Works Council representatives to find a socially acceptable solution for all impacted employees.
The expected financial impact of the reorganization, as announced earlier, is included in earnings forecast for the ongoing fiscal 2025, of 1.4 billion euros EBITDA.
With the move, the company aims to secure the future of the automotive supply segment of the Metal Forming Division in the long term, and with it around 2,000 jobs in Germany.
Meanwhile, only minor changes are planned at the European locations outside Germany such as the Automotive Components plant in Linz, and the locations in Asia and South Africa.
A program to reduce costs and raise efficiency is currently being implemented at the US location in Cartersville, Georgia.
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