The number of employees at the Schaeffler Group has fallen by around 8,250 since the end of 2018, from 92,478 to 84,223 at the end of June 2020, a decrease of just under 9 percent.

Additional structural measures

The Schaeffler Group initially responded to the coronavirus pandemic and the associated sharp decline in demand in all three divisions with short-term countermeasures, so that the company has come through the crisis comparatively well so far. In addition to expanding the European voluntary program from 1,300 to 1,900 positions, of which 1,700 are in Germany, Schaeffler used temporary measures such as closing days, reducing time accounts and vacation days, and introducing short-time work.

Despite an upturn in demand in all three divisions and four regions in recent months, uncertainty about the further course of the pandemic and the resulting deterioration in the economic situation remains high. In addition, market and sales expectations for the period up to 2025 point to a slow recovery, resulting in structural underutilization of production plants. The automotive sector in particular, which was already undergoing a structural change towards e-mobility, is being hit hard by the coronavirus crisis.

In view of the economic situation, the company therefore believes that additional structural measures are required in addition to temporary measures, which will continue to be fully utilized.

On this basis, the Board of Managing Directors of Schaeffler AG has adopted an additional package of measures at group level and as part of the divisional programs to accelerate the Schaeffler Group's transformation and improve its competitiveness and future viability. Firstly, the reduction of structural overcapacities and the consolidation of locations in Europe with a focus on Germany as well as the strengthening of competitiveness and the expansion of local expertise at selected German locations. The structural measures, which are to be largely implemented by the end of 2022, mainly affect twelve locations in Germany and two other locations in Europe.

Capacity reduction and consolidation of locations

In addition to the large locations in Herzogenaurach, Bühl, Schweinfurt, Höchstadt and Homburg, the capacity reduction and consolidation will primarily affect locations with a technologically discontinued product portfolio or small-scale plant structures. The latter include the production locations in Wuppertal, Luckenwalde and Eltmann, the Schaeffler Engineering location in Clausthal-Zellerfeld and the Aftermarket locations in Hamburg and Cologne.

In total, around 4,400 net jobs will be affected in Europe, the majority of which will be in Germany. All three divisions and all central functions are contributing to the measures.

At the Herzogenaurach location, the headquarters of the Schaeffler Group, the competence center for hydrogen technology will be located in the future in addition to the construction of a state-of-the-art central laboratory. Höchstadt will receive a competence center for toolmaking, which will take over the existing capacities from Herzogenaurach. In return, the activities of the Industry division will be relocated from Höchstadt to Schweinfurt, making Höchstadt a purely automotive location. The site in Bühl, home to the Automotive OEM division, will be expanded as a competence center for e-mobility and the series production of electric motors.

In addition, the AKO logistics center in Halle is about to go into operation. With the support of the Schaeffler Group, around 600 jobs with collective wage agreements will be created in Halle with an external service provider.

250 to 300 million euros in potential savings

The package of measures should lead to potential savings of EUR 250 to 300 million per year, 90 percent of which should be realized by 2023 and roughly half of which will be attributable to the Automotive OEM and Industry divisions and only a small portion to the Automotive Aftermarket division.

The package of measures is being implemented in a socially responsible manner on the basis of the future agreement that the company concluded with IG Metall in 2018. The company is in a constructive dialogue with employee representatives with the aim of implementing the structural measures using a mix of different instruments.