Schaeffler Employees to Start Short-Time Working
German news sources are reporting that Schaeffler Group is planning seems for most of its 25 German locations to work on short-time schedules for half a year. According to Tyres & Accessories’ German sister publication, Neue ReifenZeitung, the reports were confirmed by Schaeffler spokesman Detlef Sieverdingbeck on 2 February. The specific terms reportedly differ depending on location. The news mainly affects employees in the Automotive division, according to the Financial Times.
Meanwhile, at the end of last week Chancellor Angela Merkel reportedly turned down Schaeffler Group’s application for federal loan support. Schaeffler, the majority shareholder of Continental AG, is currently carrying around 22 billion euros of debt after taking over Conti. In an interview with Germany’s Bild newspaper, Merkel said: “We won’t pay the bill for risky company decisions.” For his part, Christian Wulff, prime minister of Lower Saxony, said the Schaeffler family and banks need to act before the government does anything. So while the chances of federal loan support are slim, the possibility of the regional government guaranteeing the 3 to 5 billion euros of new capital the company is said to be asking for, is not completely out of the question.
However, in a statement published over the weekend, Schaeffler Group representatives explained that any further moves on the part of the Schaeffler family itself are simply not practicable: “The wealth of the Schaeffler family is firmly bound up in the enterprise. The family has always re-invested the profits instead of withdrawing them from the company,” the statement read, highlighting the company’s position as a key job generator in the markets it operates in: “…in this way has it been possible to develop a world market leader in Germany having a total workforce of 70,000. Since 2001, the Group has generated 12,000 new jobs, 4,000 of which are based in Germany.”
The Schaeffler Group also “emphatically rejects” the allegation that it “gambled for high stakes” when carrying out the takeover. In its words “nobody could have foreseen the scope of the global financial crisis, which has had such a dramatic impact, particularly on the automotive industry.”
The statement said the state aid talks are “about securing financial aid for an interim period of time.” In addition to the loan support talks the company has been holding with various government representatives, Schaeffler also revealed that the company is in talks with potential investors. Whatever happens next, the company remains determined about the eventual survival and of both companies: “Schaeffler and Continental were sound and highly profitable companies before the crisis and will be just as sound and profitable when it has been overcome.”