Edscha closes Sindelfingen plant

Engineering center will move to Portugal

Remscheid, Germany. German hinged and roof system supplier Edscha will close its Sindelfingen plant by June as part of radical cost cuts that the company calls Mobility 2005.

The Sindelfingen plant -- operated by subsidiary IVM Automotive -- is one of 10 Edscha plants in Germany.

Edscha hopes the cost-cutting program will increase its profit before interest, tax and amortization to 130 million euros.

"In 2004 we will reach approximately the same sales and profit volume as in 2003. We will not manage to reach our original targets," Edscha CEO Horst Kuschetzki said.

During the 2002-2003 fiscal year Edscha achieved a profit of 101 million euros and sales of 948 million euros.

The company hopes to save approximately 25 million euros during the 2004-2005 fiscal year.

The purchasing sector alone has a cost-saving potential of 15 million euros during the first year and 30 million euros annually after that.

The supplier is also considering outsourcing part of the convertible roofs and hinge systems production.

The control systems sector will move its engineering center from Hengersberg to Vendas Novas in Portugal by mid-2005. Some of the 65 employees concerned will be able to move to the convertible sector.

However, Hengersberg remains the world's largest Edscha location with 1,200 employees.

Kuschetzki said: "We have to remain flexible in view of the rise in steel prices, the continuing weakness of both US dollar and economy, the low number of contracts being awarded and original equipment manufacturers' discount demands."

Tags: Suppliers

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