Draxlmaier misses budget target and freezes investments

Germany’s Draxlmaier car part producer, the biggest employer in the domestic automotive industry, announced the 2008 budget was not achieved in the wake of the temporary half in production at the five plants it owns in Romania.

The German producer has frozen all its investment projects for 2009. “Last year’s result was slightly below the budget initially calculated at 180m euros. Also, investments scheduled for 2009 were halted, and expenses are being kept at the lowest level, except at the plants where they are absolutely necessary,” stated Draxlmaier’s representatives. In mid-2008, the company announced it targeted cumulated turnover for the five plants of 180m euros, up 10% from the figure of 2007, when turnover was 10m euros below the 175m-euro estimate. Despite the limited development and the lower-than-expected turnover for the second consecutive year, Draxlmaier stated the relocation of Romanian activities was not included in its cost cutting plans. After at the end of last year the employees of plants in Codlea, Hunedoara, Pitesti, Satu Mare and Timisoara were sent on technical unemployment for 3-5 weeks, depending on the plant, the company in January started activities in line with the schedule presented in December. “Except the plant in Satu Mare, where a new period of technical unemployment is planned, all the plants now work at full capacity,” stated the company’s representatives. As it temporarily halted production in late 2008, Draxlmaier also made redundant 800 people working in the plants in Timisoara, Pitesti and Hunedoara. Previously, the company had renounced 1,000 employees, half the total number of people working at the plant in Codlea. “For now, we aren’t planning any more redundancies at any of the plants. We ended 2008 with 16,000 employees and in 2009 decided to keep the positions vacated voluntarily vacant,” said Draxlmaier representatives. Most domestic producers in the automotive industry have announced similar moves, so that besides freezing hiring operations, most have started already renouncing employees with temporary labour contracts or operating collective redundancies.