German truckmaker MAN to cut up to 9,500 jobs
Lossmaking German truck and bus manufacturer MAN plans to cull up to one in four jobs globally in a move that will add to concerns about the strength of the recovery in Europe’s largest economy.
The cutting of up to 9,500 jobs is part of an overhaul of the business, designed to achieve a return on sales of 8 per cent by 2023 and generate about €1.8bn of cost savings, the company said on Friday.
MAN, which generated €12.7bn in sales last year, is one of the main brands of Volkswagen’s truckmaker subsidiary Traton, which was spun out of the world’s largest carmaker last year when a 10 per cent stake was sold to outside investors and listed on the Frankfurt and Stockholm stock markets.
MAN, which has suffered from feeble profitability, has been hit hard by the Covid-19 crisis, which led to businesses being shut down and consumers reining in spending, creating less demand for industrial logistics.
In July, Traton boss Andreas Renschler, who was poached from Daimler in 2015, and MAN chief executive Joachim Drees abruptly departed after losing a power struggle with VW chief executive Herbert Diess, according to people familiar with the matter.
One month later, MAN reported a 34 per cent drop in half-year sales and posted a €423m operating loss, compared with a €248m profit for the same period in 2019.
MAN, which closed its plants in March and April, said on Friday that the restructuring measures would incur expenses “within a medium to upper three-digit million euro range”.
It also said it would reorganise its development and production network, with the future of work at its Steyr Motors plant in Austria and two others in Germany “up for discussion”.
The group is overhauling its operations at a time of fragile recovery for Germany’s significant industrial base, a powerhouse of the eurozone economy.
German industrial production plunged by a record 18 per cent between March and April and the bounceback, after businesses and factories reopened, was weaker than economists expected.
Output rose 1.2 per cent between June and July, data released this week showed, undershooting economists’ forecasts for a 4.8 per cent increase.
Shares in Traton were steady at €18.34 by lunchtime in Frankfurt on Friday. The shares have lost more than 20 per cent of their value this year and trade well below last year’s initial public offering price of €27.