ZURICH (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 and parts supplier Bosch 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)
