Page 121 - Socially-responsible-restructuring-Effective-strategies-for-supporting-redundant-workers

Socially responsible restructuring
Effective strategies for supporting redundant workers

countries worldwide. This case study analyses the establishments at Osnabrück
(the headquarters) and Rheine.
Before the beginning of major restructuring activities in 2006, the
establishments had about
6 000 employees; at the beginning of 2009 (before the set-up of the current
transfer company) there were about 3 770 workers. The average age of the
workforce is high at 47 years and the dominating occupations are automotive-
related manufacturing jobs. Unskilled employees make up one third of the
workforce.
Beginning in 2006, Karmann faced increasing difficulties in acquiring new
contracts in its car manufacturing operations. This was due largely to two
tendencies among automotive companies. First, higher production flexibility
through advances in manufacturing technology made it possible to reintegrate
the manufacturing of smaller product lines, and second, car manufacturing was
increasingly transferred to low-wage countries. Several European competitors
had felt the impact of these developments earlier than Karmann, with many of
them vanishing from the market.
Karmann eventually decided to abandon its car manufacturing operations and
concentrate on supplying car roofs and bodies. Large parts of the workforce were
made redundant in several waves during the following years, with each social
plan involving a transfer company as the principal instrument of restructuring.
Specified terms have deteriorated steadily from one social plan to the next,
reflecting the worsening overall situation of the company.
Car manufacturing was finally shut down in June 2009, the demand for car
parts having decreased drastically because of the current financial crisis. This
aggravated Karmann’s financial situation to the extent that the company declared
insolvency in April 2009. The current transfer company had been set up already
at the beginning of 2009 and is the fourth one to date.

6.6.2. Restructuring and job losses
A total of 2 270 employees are currently being made redundant (1 477 in
Osnabrück and 793 in Rheine). Of these, 1 738 have entered the transfer
company. The predominant motivation for not joining is the low surplus Karmann
pays additional to the structural short-time work benefits provided by PES,
thereby reducing the attractiveness of the transfer company compared to
unemployment. Further, immigrant workers who had planned to return to their
home country after retirement often decide to do so a few years earlier when laid
off.

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