Suppliers escape to the East

Thousands of German jobs threatened

Munich. Every fifth job in the German auto supply industry is under threat from low-wage countries, concludes a study by Alix Partners business consultant, exclusively obtained by Automobilwoche.

Turnaround specialists Alix examined the performance over the last three years of 140 large automotive suppliers, including 25 based in Germany.

"Almost every German company is considering moving their production abroad," said Alix Managing Director Roman Zeller. "A real suction effect has developed here."

A current Automobilwoche poll, in which the 20 largest German suppliers participated, showed a similar trend.

Six companies said they are planning to further increase operations in eastern Europe. They hope to build new production locations there within the next two years.

Visteon, for example, plans to build an electronics plant or to open a location for software development. The company will make a decision by the end of September.

ZF Friedrichshafen also has plans to move abroad. "Labor intensive manufacturing and assembly processes will partially be moved to eastern Europe over the next few years," says ZF.

INA-Schaeffler, the antifriction bearing systems specialist, said it would build a new plant in Romania. The Freudenberg-based company plans to expand its existing locations in eastern Europe and to reduce the number of employees in Germany.

Webasto also wants to invest more in Eastern Europe. ThyssenKrupp Automotive and Mahle prefer Asian locations.

According to research by the Center of Automotive Research (CAR) in Gelsenkirchen, 40 percent of German auto suppliers have production locations in eastern Europe. The CAR experts estimate that so far approximately 100,000 jobs have been lost in Germany as a result.

"No supplier really wants to move. But the decreased margins and the increasing competition such as from low-cost suppliers in China hardly leaves them any choice," said Vinzenz Schwegmann, the author of the Alix study. He added that the high wage costs per piece in Germany cannot be ignored.

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