Schaeffler AG’s Board of Managing Directors has approved structural changes focused on enhancing competitiveness across Germany and Europe, responding to challenges in the automotive supply industry, global competition, and a shifting market landscape.
The restructuring has three main objectives: improving earnings in the Bearings & Industrial Solutions division, achieving synergies from the recent merger with Vitesco Technologies Group AG, and adapting to industry shifts as demand declines for internal combustion engine (ICE) technology and slows for electric vehicle programs in Europe.
Improving Earnings in Bearings
The Bearings & Industrial Solutions division faces economic challenges, driving a need for structural adjustments to improve profitability. CEO Sascha Zaps highlighted the division’s overcapacity, particularly in Europe, and announced measures to consolidate production, reduce costs, and increase localization. These changes will impact the Schweinfurt and Homburg sites, with operations consolidated at Schweinfurt’s main plant, and relocation of Homburg’s linear technology operations. The adjustments are aimed at making the division more resilient to fluctuating demand.
Synergies from Vitesco Merger
Since the October 2024 merger, Schaeffler expects to achieve €600 million in synergies by 2029, primarily through purchasing efficiencies and revenue growth. The merger includes workforce downsizing, with about 600 job cuts at Schaeffler’s Regensburg and Herzogenaurach headquarters, where Powertrain Solutions and E-Mobility divisions are based. These reductions streamline central functions and R&D.
Transformation in Powertrain
Shifts from ICE technology to electrification necessitate realignment in the Powertrain & Chassis and E-Mobility divisions, affecting facilities in Herzogenaurach, Schwalbach, Regensburg, Nuremberg, and Berlin. Adjustments are in response to reduced ICE component demand and slower-than-anticipated electric vehicle growth, along with increased competition and the need for cost-efficient R&D localization.
Job Reductions and Socially Equitable Measures
The restructuring will lead to approximately 4,700 job reductions across Europe, with a net loss of around 3,700 jobs after relocating some operations. In Germany, 2,800 positions will be affected across ten locations. Schaeffler aims to implement these reductions equitably, in coordination with employee representatives, and in line with the 2018 Future Accord with IG Metall, prioritizing natural attrition, voluntary exits, and early retirements.
Financial Impact and Future Outlook
Schaeffler projects annual savings of €290 million by 2029, with €75 million from Vitesco merger synergies. The implementation will incur a one-time cost of €580 million, largely for provisions and relocation. The company remains committed to employee development, with 40,000 European employees engaged in upskilling programs since 2022.
CEO Klaus Rosenfeld emphasized the importance of these measures in maintaining Schaeffler’s competitiveness amid current market dynamics, underscoring the company’s commitment to Germany and Europe as key business locations. Schaeffler will continue investing in critical areas and technologies to meet evolving market demands.
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