German propulsion system specialist Voith is planning a comprehensive package of measures for its Group Division Voith Turbo to secure its competitiveness and viability in the long term. The focus is on streamlining its overall production footprint in Germany and on creating centralised, more efficient sites. To this end, production in Sonthofen and Zschopau is to be discontinued by the end of 2020 with the loss of 230 jobs and 370 employees offered contracts at other plants.
“Voith Turbo is confronted with increasing competitive and margin pressure. At the same time, the need for investment is continuously increasing. Investments are necessary, if we are to maintain our position as a technology and innovation leader in the industries that we supply. With the planned package of measures, we want to make Voith Turbo more efficient and effective, securing its competitiveness and viability in the long term,” said Dr. Uwe Knotzer, Chairman of the Management Board of the Turbo Division.
The plans envisage specific changes in the production network, particularly in Germany. Voith currently manufactures products in Sonthofen and Zschopau. Production at these sites is no longer economically viable and Voith plans to therefore discontinue operations at these sites by the end of 2020. These sites’ capacities will then be transferred to other existing locations within the Group Division.
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The concentration on fewer, but larger and more effective sites will be accompanied by a moderate job cut predominantly in Germany. A total of around 230 jobs would be lost on balance and around 370 jobs would be relocated to other sites. The package of measures is expected to have a positive impact on Voith Turbo’s earnings in the low double-digit millions range by 2021.
Dr. Knotzer added, “The management of Voith Turbo is aware that the planned cuts at the affected locations are very painful. And we are also aware of the responsibility we bear as a company. This is why we want to implement the forthcoming changes as fairly and socially responsible as possible, both in close collaboration with the works council. At the same time, we are firmly convinced that the planned measures are unavoidable if we are to keep Voith Turbo on the road to success in a rapidly changing environment.”