Germany’s car market has been hit by another serious blow, with job losses likely at a major parts manufacturer.
Jobs could be lost at a major car parts manufacturer (stock image) (Image: Getty)
Germany’s car market faces a major blow ahead of the New Year after a top supplier filed for bankruptcy in the run-up to Christmas. Diepersdorf Plastic Manufacturing, a major supplier of plastic components to the automotive industry, filed for insolvency at the Nuremberg District Court back in November.
Rising costs and a drop in European vehicle production are thought to be behind a drop in revenues. A loss of finances has forced the company into restructuring, with around 1,000 jobs understood to be at risk. The company is vital for the car industry, producing some of the most important car components.
Other firms have also made cutbacks in recent months (Image: Getty)
The brand has specialised in unique components, building elements such as radiator grilles, mirror covers and steering wheel housings. It is understood that workers committed to three different sites across Germany could be affected by job losses.
It is believed that approximately 830 employees could be at risk at the firm’s plant in Diepersdorf, Bavaria. Meanwhile, around 95 employees could be under threat at a plant in Oberlungwitz, Saxony, with 120 employees facing losing their jobs in Lüdenscheid, North Rhine-Westphalia.
According to Volker Böhm, the preliminary insolvency administrator, the plastics-processing segment remains under severe economic strain. However, the expert stressed that employee wages and salaries have been secured for the next two months through insolvency benefits.
This would help to buy crucial time to stabilise operations and evaluate restructuring paths before people are expected to leave the business. It is hoped that Mr Böhm can negotiate with automotive customers and the supplier network to bring the firm back on track.
The business has been sold twice in recent years, but a new takeover is thought to be more unlikely this time around. Plastic Manufacturing adds to a growing list of medium-sized suppliers who have been lost in recent months.
Earlier in November, top manufacturer Mahle said it would cut around 1,000 jobs. Meanwhile, leading brands such as Bosch and ZF Friedrichshafen have also committed to downsizing their teams.
Firms are struggling to adapt to rising costs, with fears that many smaller suppliers could be vulnerable as more motorists switch to electric vehicles. Many brands have been integrated into the combustion-engine supply chain and could struggle to adapt as EV sales rise.
