Schuler streamlining production in Germany
- New machine manufacturing pooled in Erfurt and Göppingen
- Production closures in Netphen, Waghäusel and Weingarten
- Personnel measures affecting approximately 450 employees
Göppingen, Germany, 08/26/2015 – Schuler AG is streamlining its production in Germany and will only be manufacturing at four facilities in future, instead of the seven at present. “We merge the wide range of production sites in Germany resulting from acquisitions made in the past. This will create more efficient manufacturing structures and help us remain successful in the face of fierce international competition,” explained CEO Stefan Klebert on Wednesday following a meeting of Schuler AG’s Supervisory Board in Göppingen, Germany.
The press manufacturer has strongly expanded its manufacturing activities in foreign markets over the past years in order to meet shifts in its global demand profile. Moreover, changes in the product mix have also resulted in revised capacity needs. Schuler has successfully entered new market segments, such as equipment for the production of large pipes or high-speed railway wheels. The plant manufacturer acts as a systems supplier for such orders and buys in a large number of components – thus reducing the proportion of in-house production.
Production pooled in Göppingen and Erfurt
In the new manufacturing concept for Germany, the Göppingen plant will produce all presses which can be fully assembled and put into operation in-house. At this site, the company is currently investing € 40 million in the construction of a Technology and Development Center as well as a test center for lightweight construction in the automotive sector. The facility in Erfurt will be the company’s only German production site for large-scale presses. Over the past few years, the press manufacturer has invested tens of millions in modern manufacturing equipment. “This is a clear sign that Germany will remain our high-tech location and home base – despite all our globalization activities,” explained Klebert.
At the same time, the production of presses and new machine components will be discontinued at the company’s sites in Netphen (by the end of 2016), Waghäusel (by the end of 2017) and Weingarten (by the end of 2017). External assembly, commissioning and service will be maintained at all three sites and engineering and support activities will be continued.
Extensive personnel measures
The planned changes will affect around 450 jobs in Germany in the medium term. Schuler will try to implement these measures in a manner which is as socially compatible as possible. This can be achieved in part by transferring staff to other business units or sites, giving preference in the case of internal vacancies, offering semi-retirement programs or making voluntary redundancy agreements.
The company has estimated that the consolidation of its manufacturing structures in Germany will involve costs of around € 55 million. Provisions will be formed and costs incurred for the major share of this amount in fiscal year 2015. Following the completion of these measures, the Board of Management expects annual cost reductions of € 30 to € 35 million.
In 2011, Schuler launched a strategy and growth program in connection with the acquisition of Müller Weingarten in 2007. In addition to realignment with target markets and technology fields, this also involved a streamlining of the Group’s organization and a reduction of duplicate structures. Schuler continued the strategic project in 2013 in order to adapt the company to changing global challenges. “All in all, the measures helped Schuler return to growth and achieve its current healthy financial status after the difficult years of 2009 and 2010,” says Klebert.
In its fiscal year 2015, Schuler expects sales to exceed the prior-year figure of € 1.18 billion. The operating result before special items for factory consolidation is expected to be on a par with the healthy prior-year level.