Schaeffler to cut 3,460 jobs, shut five European plants as auto slump bites (updated)

Schaeffler AG

Yesterday 08:11

Adds CEO comments from interview in paragraph 3-4, 8, background in paragraphs 5-6, conference call in paragraphs 9-12
By Amir  Orusov
Nov 3 (Reuters) - German auto supplier Schaeffler SHA0n.DE said on Tuesday it would cut 3,460 jobs and close five sites in Europe as it responds to weakening demand for combustion-engine vehicles, slower-than-expected electric-vehicle adoption and intense competition.
The company said the cuts would affect 16 sites, including shutting four plants in Germany and one in Belgium. About 2,660 jobs will be eliminated in Germany by 2028, equivalent to roughly 9% of Schaeffler's core German workforce.
CEO Klaus Rosenfeld told Reuters the measures should ensure Schaeffler can continue to develop and manufacture products competitively in Germany and Europe despite significantly higher labour costs.
"Our personnel costs in Germany are around 2.5 times higher than in other European countries," he said.
Schaeffler's cuts reflect mounting strain across Germany's automotive supply chain, as suppliers adapt to lower vehicle production, slower-than-expected EV growth and growing competition from Chinese rivals. 
Major carmakers including Schaeffler customer Volkswagen .DE> , Mercedes-Benz MBGn.DE and Porsche P911_p.DE are all pursuing cost-cutting programmes to shore up profitability in a declining market.

        Schaeffler expects its cuts will deliver annual savings of about €300 million ($336 million) by 2030, with one-off costs of roughly €480 million, most of which will be booked in 2026.
Rosenfeld declined to rule out further job cuts beyond 2028, saying Schaeffler must first negotiate and implement the current programme before assessing whether additional measures are needed.
As part of the restructuring, Schaeffler's management board will cut its own pay by 10% over two years, the CEO said during a call with analysts.
"That is not just a signal to the workers council and the our employee representatives, but also something where we want to contribute immediately to a cost problem that needs to be addressed," Rosenfeld said.
Despite the restructuring, Rosenfeld reiterated Schaeffler's commitment to paying a dividend and said he remained confident about fourth-quarter cash generation.
"We want to pay continuous dividend to all our shareholders, even in times where restructuring is necessary," he said.
($1 = 0.8937 euros)

 (Reporting by Amir Orusov in Gdansk, editing by Milla Nissi-Prussak and Matt Scuffham)
 ((Amir.orusov@thomsonreuters.com))