Voestalpine Reorganizes Automotive Component Business Operations Across German Sites

21 Oct, 2024

Voestalpine, the Austrian specialty steelmaker, announced a significant reorganization of its automotive component business locations in Germany, responding to declining demand and structural changes within the industry. The company revealed on Friday that it will close one of its sites as part of this strategic shift. The affected plants in Dettingen, Schmoelln, Schwaebisch Gmuend, and Boehmenkirch will be integrated into a cohesive production network, with each facility focusing on specific core technologies. This restructuring aims to secure the long-term viability of the automotive supply segment within Voestalpine's Metal Forming Division and safeguard approximately 2,000 jobs across Germany.

The decision to discontinue operations at the Birkenfeld location is subject to negotiations with the works council and the IG Metall trade union, which will directly impact around 220 employees. Voestalpine cited ongoing investments and improvement measures; however, the persistent slowdown in the macroeconomic landscape and a corresponding decline in orders from the automotive sector have rendered it financially unsustainable to maintain operations at that site. Additionally, it is anticipated that about a third of the workforce at Dettingen, currently comprising 650 employees, could also face adjustments as part of this realignment.

The automotive industry in Europe is grappling with challenges such as weak demand and escalating costs. Notably, German automakers, including Volkswagen, are encountering intensified competition from local manufacturers in China. This shifting landscape underscores the need for companies like Voestalpine to adapt their operational strategies to remain competitive and responsive to market dynamics.

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