Switzerland's Feintool plans cuts in Germany, cites EV market market weakness (updated)

Feintool International Holding AG

03/12/2024 07:10

(Adds detail, background context)
       ZURICH, Dec 3 (Reuters) - Automotive supplier Feintool
will close one of its sites in Germany and cut its workforce by
as many as 200 people due to weakness in demand for electric
vehicles and uncertainty over the shift to renewable energy, the
Swiss firm said on Tuesday.
    Feintool plans a shake-up of production of rotors and
stators for electric motors, and said that its unprofitable site
in Sachsenheim near Stuttgart would be closed, with most of its
production moved to its Tokod facility in Hungary.
    In its stamping business unit, which specialises in
electrolamination stamping, the centres for research and
development and toolmaking, as well as automated automotive
production, will be pooled in Vaihingen near Sachsenheim.
    The changes, which will be subject to consultation with
workers' representatives, would preserve around 250 of 450 jobs
currently in Sachsenheim and Vaihingen, Feintool said.
    German automakers and suppliers are battling with weak
demand, high production costs, competition from Chinese rivals
and a slower-than-expected electric vehicle transition.
    Volkswagen  VOWG_p.DE  and parts supplier Bosch  ROBG.UL 
are among the companies looking to restructure and cut costs.
    The Munich-based Ifo institute said sentiment in the auto
industry is deteriorating rapidly, revealing a fresh decline in
its indicator for the sector in November, fueled by weak demand.
    Sachsenheim's struggles were mainly due to external economic
factors and current conditions in Germany, Feintool said.
    Feintool's plant in Jessen, Saxony-Anhalt, would also be
affected by the reorganisation but to a lesser extent, it said.
    Feintool listed political uncertainty over electromobility,
the transition to renewable energies, and an economic downturn
in the industrial business as factors behind the changes.
    The restructuring will impact earnings in 2024 primarily,
said Feintool, which posted a net loss of 3.2 million Swiss
francs ($3.60 million) for the first half of 2024.
    The changes will boost the stamping business unit's results,
and once relocations are complete, they would yield savings of
15 million francs per year in the medium term, it said.
    ($1 = 0.8879 Swiss francs)

 (Reporting by Dave Graham and Rachel More)
 ((dave.graham@thomsonreuters.com; Reuters Messaging:
dave.graham.thomsonreuters.com@reuters.net))