Schaeffler has been undergoing restructuring for several years. The aim of the transformation: to sustainably improve competitiveness and future viability. In spring 2019, the Group therefore launched three structural programs: RACE (Automotive OEM), GRIP (Automotive Aftermarket) and FIT (Industrial). In its half-year figures, Schaeffler announced initial successes from the measures. The structural and efficiency measures initiated in this context had a positive impact on cost of sales. In addition, measures were introduced and continued in the first half of 2020 to mitigate the financial effects triggered by the coronavirus pandemic. These include temporary measures such as the introduction and expansion of short-time working, the reduction of vacation days and time accounts, hiring freezes and plant closures. The program was already expanded from 1,300 to 1,900 jobs to be cut in the first quarter.

Another 4,400 jobs cut

Schaeffler has now announced a net reduction of around 4,400 jobs at twelve locations in Germany and two more in Europe by the end of 2022. The Group expects this to result in potential savings of 250 to 300 million euros per year, 90% of which should be realized by 2023. This will be offset by transformation costs of around 700 million euros.

Schaeffler justifies the further job cuts by stating that the current economic situation makes additional structural measures absolutely necessary in addition to temporary measures. Two directions are planned: the reduction of structural overcapacities and the consolidation of locations in Europe with a focus on Germany as well as the strengthening of competitiveness and the expansion of local competencies at selected German locations.

In 2018, the global automotive and industrial supplier Schaeffler had already begun to adapt its European plant network, streamline the organization and align it more closely with the needs of the divisions in light of the emerging technological and regulatory changes as well as changing customer requirements. Against this backdrop, the presence in the UK was reduced by three locations in November 2018. In addition, the RACE efficiency program was established in the Automotive OEM division in spring 2019, followed by the GRIP (Automotive Aftermarket) and FIT (Industrial) division programs in the course of the same year. Since then, the three Automotive locations in Hamm, Unna and Kaltennordheim have been sold as part of RACE. Furthermore, an additional voluntary program was launched in September 2019 before the outbreak of the coronavirus crisis and is currently being implemented.

The measures at a glance

Despite an upturn in demand in all three divisions and four regions in recent months, according to Schaeffler, uncertainty about the further course of the pandemic and the resulting deterioration in the economic situation remains high. In addition, market and sales expectations for the time horizon until 2025 point to a slow recovery, resulting in structural underutilization of production capacity. The automotive sector in particular, which was already undergoing a structural change towards e-mobility, is being hit hard by the coronavirus crisis. The global production of vehicles expected for 2020 is significantly below the previous year at -20%. The pre-crisis level is not expected to be reached until 2024 at the earliest. Global industrial production is also expected to decline significantly in 2020, at an estimated -8% to -12%.

Affected locations at a glance

The reduction of 4,400 jobs affects all three divisions, the company announced.

In addition to the major locations in Herzogenaurach, Bühl, Schweinfurt, Höchstadt and Homburg, the capacity reduction and consolidation will primarily affect locations with a technologically discontinued product portfolio or small-scale plant structures. The latter include the production locations in Wuppertal, Luckenwalde and Eltmann, the Schaeffler Engineering location in Clausthal-Zellerfeld and the Aftermarket locations in Hamburg and Cologne.

Schaeffler no longer rules out closing the Wuppertal site , but the company would like to try to retain as many jobs as possible in Germany by relocating part of its production.

A partial relocation of activities is planned for the Luckenwalde site. At the same time, the company is actively looking for alternative uses and sales opportunities.

Production at the Eltmann site will be relocated to Schweinfurt. The majority of jobs are therefore to be retained in geographical proximity. Eltmann mainly produces for the Schweinfurt site.

The Clausthal-Zellerfeld site will be closed if no sales opportunities arise in the short term.

Employees at the Aftermarket sites in Hamburg and Cologne will be offered the opportunity to work from home in the future, if possible.

Schaeffler would also like to reduce the administrative areas of the central functions and the divisions. This primarily affects the Herzogenaurach, Schweinfurt, Bühl and Homburg locations.

Technology and production sites are being expanded

Individual technology and production locations with specific expertise are also to be expanded. These locations include Herzogenaurach, Höchstadt, Bühl and Schweinfurt. The headquarters of the Automotive Aftermarket division in Langen is also to be expanded through personnel transfers.

In addition to the establishment of a central laboratory, the competence center for hydrogen technology is to be located at the Herzogenaurach headquarters in the future.

Höchstadt will become a purely automotive location. A competence center for toolmaking is to be established here, which will take over the existing capacities from Herzogenaurach. In return, the activities of the Industrial Division will be relocated from Höchstadt to Schweinfurt.

Schaeffler intends to expand the location in Bühl, where the Automotive OEM division is based, as a competence center for e-mobility and the series production of electric motors. In this context, an additional 500 jobs will be created in Bühl, which were originally planned for the Szombathely site in Hungary. The construction of the plant in Hungary is not affected by this.

Schweinfurt, the headquarters of the Industrial Division, is to be strengthened by bundling the value creation for classic bearing products in the medium and large diameter range. The main development activities for future fields of the Industrial division, such as robotics, will also be further strengthened. An innovation center for Group-wide Industry 4.0 topics will also be established. There are also plans to expand the aerospace specialty products area.

The AKO logistics center in Halle is about to go into operation. Around 600 jobs will be created in Halle with an external service provider with collective wage agreements.