Despite strong 2004, uncertainty looms for Karmann

Production sped past 94,000 units last year, but Karmann braces for tougher times

Osnabrueck, Germany. With 94,338 vehicles produced in 2004, up from 74,647 in 2003, the Karmann Group raced past its planned annual output and reached a new record.

But uncertainty about 2005 reigns at its headquarters. "It's impossible to make a prediction about the current year," said a company spokesman. Too much depends on exchange rates for the US dollar and on the plans of Karmann's automotive customers.

He added: "But we certainly won't reach last year's totals."

Most vehicles produced in Osnabrueck and Rheine have dropped below peak production levels due to falling demand.

The group consists of Wilhelm Karmann GmbH and Karmann-Rheine, along with seven other companies worldwide. Its total sales rose 16 percent to 2.8 billion euros in 2004. The group said operating profit was 30 percent of total revenues.

In addition, the company was able to boost net assets from 237.4 to 262.4 million euros -- a success for Bernd Lieberoth-Leden, CEO of Wilhelm Karmann GmbH.

Last year, to increase competitiveness, he cut 700 short-term positions in vehicle production and 250 jobs in equipment and fixture manufacturing.

In addition, through an agreement with the firm's works council, the proportion of manufacturing kept in-house was cut back at its Osnabrueck tool-making operation.

After this month, 2,000 Karmann employees will go on short-time schedules under a new contract.