Most enthusiasts know Schaeffler by its brand names. INA makes the cam phaser rattling in a tired engine. FAG makes the wheel bearing humming at 60 mph. The company behind those boxes just told employees it has too many factories and too many management layers for the market Europe actually has, and it is cutting engineers as well.
On November 3, Schaeffler announced a new restructuring program. It cuts a net 3,460 jobs across 16 European locations and closes five sites. Germany takes most of the hit, with about 2,660 positions and four of the five closures. The fifth closure is a small site in Herstal, Belgium. Schaeffler blamed weak demand for combustion-engine vehicles, slower-than-expected EV adoption, high labor costs in Germany and an organization it admits has too many management layers.
Which plants close, and what they make
Two of the closures tell you a lot. Dortmund, with about 430 employees, and Morbach, with about 160, both belong to the Powertrain & Chassis division and build parts for internal-combustion engines. Schaeffler is also shutting its Berlin operations and closing Schwalbach, where much of the staff is expected to move to Frankfurt.
Related Articles
- Arizona Photo Radar Tickets Don’t Count Until Someone Serves You. Here’s What Prop 319 Changes About That
- Bexar County’s Tax Assessor Called Emissions Delay Reports ‘Not Correct.’ Now San Antonio Drivers Need an $18.50 Test to Renew
The rest of the program reshuffles existing sites. Toolmaking ends at Höchstadt, and special-machinery work shrinks at Erlangen and Schweinfurt. Herzogenaurach, Bühl, Nuremberg and Regensburg also face capacity changes. Outside Germany, production and development will be adjusted in Haguenau and Toulouse in France and in Skalica and Kysuce in Slovakia.
About half the cuts come from production, 30% from research and development, and 20% from other functions. Schaeffler blames weak combustion-engine demand, which suggests it sees more engine engineers than engine programs. That is our read, not the company’s.
The numbers behind the decision
Schaeffler’s preliminary nine-month figures, released in October, show why combustion-engine work is being trimmed first. Powertrain & Chassis revenue fell from €6.7 billion to €6.3 billion over nine months, and its third-quarter margin before special items dropped from 11.4% to 10.2%. Group revenue was flat at €5.8 billion for the quarter, and the group margin before special items slipped to 4.2% from 4.5%.
The E-Mobility division, which grew out of the 2024 Vitesco merger, actually grew revenue, from €3.7 billion to €3.9 billion. It’s still deep in the red, with a nine-month margin of –14.8%. So the business that is shrinking makes money, and the business that is growing loses money. Schaeffler is now doing that math in public, with plant closures attached.
The company expects about €300 million a year in savings starting in 2030. It expects one-time costs of about €480 million, most of it booked this year. Counting earlier programs and 1,800 partial-retirement agreements signed in October, Schaeffler says its core German workforce, which stood at 31,957 at the end of September, will shrink by about 18% by 2028.
Related Articles
- Investigators Checked One Charlotte Cop’s Plate-Reader Searches and Found a Group Text Thread Tied to Six More Officers
- GM Pays 36 States $220 Million Over Selling Your Driving Data to Insurers. Owners Get Zilch
There’s also a twist German labor watchers will notice: a “solidarity contribution.” Schaeffler plans a temporary, voluntary pay cut that starts with the management board and extends down through every level of the company. The details still have to be worked out with employee representatives under an existing 2018 agreement. The company says the cuts would have been “even more extensive” without it.
What this means at the parts counter
Nothing in the announcement points to a parts shortage. The division that supplies replacement parts, Vehicle Lifetime Solutions, is Schaeffler’s most profitable. It held a 15.1% margin through the first nine months on €2.4 billion in revenue. Cars in Europe and North America keep getting older, and older cars need clutches, timing components and bearings. Schaeffler has no reason to give up that business.
When a factory closes, its parts usually move to another plant, which can bring revised part numbers, so check supersessions when you order. Restructuring costs sometimes show up later in wholesale prices. And fewer combustion-engine parts made in Germany isn’t fewer made worldwide; the global fleet will need them for decades.
Where Schaeffler wants to go instead
The company says some of the lost jobs should be offset by new roles in growth areas. Its production chief named humanoid robotics and defense as fields that can use Schaeffler’s skill with precision motion parts. Its October update had already pointed to a growing order book for humanoid robotics components. That kind of growth doesn’t lift Dortmund’s headcount, but a company that makes extremely precise bearings has more potential customers than just car companies.
Schaeffler announced its last big round of European cuts in November 2024, and this is the next one. Two rounds in two years doesn’t read like a company that thinks the bottom is behind it.
Does a bearing maker pivoting to humanoid robots and defense sound like a plan, or like a company hunting for any customer that isn’t a carmaker?
Images Via: Wikipedia