Grammer reacts to substantial order decline with workforce reduction

With elimination of a total of 227 jobs at its locations in the Amberg region, the reaction of GRAMMER AG (www.grammer.com), producer of components for cars and commercial vehicles, to the worldwide decline in demand of supplier products is now also effecting Germany. These measures were necessary to sustainably ensure the long-term viability of the Company.

As a global manufacturer of components and seating systems for the automobile and commercial vehicle industries, GRAMMER AG has been impacted by the dramatic effects of the financial and economic crisis. Based on the current order situation, the Executive Board expects a decline in revenue for GRAMMER Group of between 25 and 30 percent in the first half of 2009. In order to also enable GRAMMER AG to react as swiftly as possible to the significant reduction in order volume, further structural measures have become essential, in addition to the introduction of short-time work and the cutback in numbers of temporary workers already implemented in January 2009.

Advert

Agreement to early termination of the supplementary wage agreement
From the current perspective, it cannot be expected that order volumes will recover to the previous year’s level in the near future. Consequently, the Company and works council have agreed on a reconciliation of interests and a social plan. Additionally, the Executive Board of GRAMMER AG and the union IG Metall of Bavaria came to terms for early termination of the supplementary wage agreement as of December 31, 2009. This will provide the Company with the needed flexibility to adjust capacities to changing market conditions.

Implementation of the planned structural measures will result in layoffs of 184 blue and white collar workers at the Kümmersbruck, Immenstetten and Amberg locations. Moreover, 43 temporary jobs will be eliminated at the Haselmühl site. To compensate for this and lessen the negative impact on the employees affected by the layoffs, in addition to severance payments, a temporary transfer company has been arranged between the Company and works council as part of the social plan. This will open new career perspectives for the employees, and offer them a period of transition before unemployment. GRAMMER AG anticipates expenditures in the midmillions as a result of these measures.

Reduction of 1,000 jobs worldwide since the beginning of the year
In the context of early implementation of the structural measures, at locations abroad in particular, GRAMMER Group’s global workforce has been reduced by more than 1,000 employees since December 31, 2008. Including the current measuers in the GRAMMER AG, since the first real effects of the financial and economic crisis on the Company, the number of employees has actually declined by nearly 2,000 (roughly 20%) and been adapted to the lower order levels.

Expansion of short-time work
In order to permit further rapid reaction to capacity declines, an extension and expansion of the existing short-time work arrangements. The goal of these comprehensive measures is to secure the position of GRAMMER AG for the long term and set up the company to deal with a sustained period of weak demand.

About Grammer
Grammer AG is specialized in the development and production of components and systems for automotive interiors as well as driver and passenger seats for offroad vehicles (tractors, construction machinery, forklifts), trucks, buses and trains. Our Seating Systems division comprises the truck and offroad seat segments as well as train and bus seating. In the Automotive division, we supply headrests, armrests, center console systems and integrated child safety seats to premium automakers and automotive system suppliers.

Grammer is represented in 17 countries worldwide with a workforce of approx. 8,000 employees across its 23 fully consolidated subsidiaries. Grammer shares are listed in the S-DAX segment of the German Stock Exchange, and are traded on the Munich and Frankfurt stock exchanges, via the Xetra electronic trading platform and on the OTC markets of the Stuttgart, Berlin and Hamburg stock exchanges.

Grammer AG, Amberg, Germany

back to news list