Mahle announces job reductions in response to decreased revenue - Mahle acknowledges downturn in revenue by shedding workforce positions
In the face of a difficult economic landscape and declining global sales in the automotive sector, Mahle, a leading German automotive supplier, has announced plans for further job cuts and plant closures.
Despite reporting a modest net profit of EUR 22 million for 2024, Mahle's CEO, Arnd Franz, acknowledges the challenging current fiscal year, with revenue lower than initially planned. The ongoing turbulence in the economic environment is taking a toll on the company's financial results.
Franz believes Mahle is on the right track, but the company is adjusting its capacities, including personnel capacities and fixed costs, to react to the changed sales situation. This adjustment is expected to lead to a decrease in the number of jobs over the next 12 months.
The production site in Charleston, USA, is set to close in the first quarter of 2025, joining the previously closed plants in Gaildorf (district of Schwäbisch Hall), Germany, and Mattighofen, Austria, which were shut down at the end of 2024. The agreement to avoid plant closures until 2025 no longer applies due to these closures.
The high taxes and energy costs in Germany are contributing to the financial pressure on companies like Mahle, justifying workforce reductions as part of cost-cutting measures. Other automotive suppliers, such as Bosch, are also cutting jobs due to weak vehicle demand and increased competition.
Mahle employed around 10,000 people in Germany at the end of last year. The exact scale and timing of the job cuts have not been disclosed, but the broader context indicates a trend of job reductions linked to weakening demand, revenue pressures, and structural changes in the industry.
As part of its efforts to navigate these challenges, Mahle is developing future concepts for its individual locations. The company had initially agreed with the works council in August 2023 to avoid plant closures in Germany until the end of 2025. However, the changing circumstances have necessitated a reevaluation of these plans.
In conclusion, Mahle's planned job cuts and plant closures are a response to **revenue decline amid a challenging economic environment, high operational costs, and weakening demand in the automotive market during the current fiscal year**. The company continues to strive for growth and adaptation in the face of these challenges.
- In light of the declining revenue due to a challenging economic environment in various industries, including automotive, Mahle is reviewing its employment policies to reduce operational costs.
- Amidst financial pressure from high taxes and energy costs in Germany, Mahle, like other aerospace and finance-related companies, is implementing cost-cutting measures, such as job cuts, as a part of their employment policies.
