MAN eyes 2,000 job cuts in parent VW Group-led trucks revamp

[kscarbel2]

Reuters / June 17, 2015

Germany's MAN SE could cut as many as 2,000 jobs at its main trucks division as the Volkswagen-owned company slims operations under a wider reorganisation of production, company and union sources said.

Management and union officials at MAN have been in talks for months on how to reshuffle truck production to achieve planned savings of more than 600 million euros ($676 million) by 2017 to make it more efficient as parent VW pushes to become a global force in trucks.

VW, Europe's largest vehicle manufacturer, has spent billions of euros over the past decade on expanding stakes in MAN and Scania to fulfil a long-standing ambition to compete with truck market leaders Daimler and Volvo.

But it has yet to reap significant cost savings from the combination and last month aligned MAN and Swedish peer Scania in a new truck holding company.

The new strategy foresees abandoning truck production at MAN's plant in Salzgitter in northern Germany, where about 2,500 people are employed, and converting the site into a component factory, the sources said.

Assembly of heavy trucks would be concentrated at the main factory in Munich, and light and medium-sized trucks would be built (at the former Steyr truck plant) in Steyr, Austria, they said.

(http://www.corporate.man.eu/en/company/production/man-truck-and-bus/man-trucks_-vw-trucks/MAN-Trucks_-VW-Trucks.html)

The reshuffle will entail heavy investment in MAN's truck-making facilities, company sources said, without being specific.

MAN employs 15,000 workers in Germany, almost half its 34,000-strong global labour force.

"The key question is: How can we better use our production capacities?" Markus Vogl, works council chief at MAN Truck & Bus's Austrian operations, told Reuters.

"We have more capacity than we currently need. The question is how to position ourselves sensibly."

The talks between MAN's management and union representatives are ongoing and will probably conclude next week, one of the labour sources said.

MAN and parent VW declined comment.

Management and union representatives aren't seeking outright job losses, both company and union sources said.

Instead, the headcount could be lowered through voluntary redundancy, early retirement as well as reassigning staff to other roles within VW, they said.

MAN, which VW fully integrated into its multi-brand group in 2013, has long suffered from languishing profitability and high fixed costs.

"VW must become faster, more flexible and nimble," Chief Executive Martin Winterkorn told a staff gathering at Wolfsburg headquarters on Wednesday. "We are trying to get better in all areas where we are still underperforming."

Andreas Renschler, head of VW's new truck holding company, wants to boost the operating margin at MAN's truck operations to at least 6 percent, from 1.8 percent in 2014, Germany's Manager Magazin reported on Wednesday, citing sources. ($1 = 0.8876 euros)

[RoadwayR]

And they want Navistar?

[kscarbel2]

And they want Navistar?

Once Volkswagen Group puts you in their sights, they can always swing the funding.

[david wild]

If you ever have the chance to use a MAN truck you will like them, well built and all kinds of cool stuff to work with, had them in Iraq, loved them. used them in other places too, but they performed really good in the hot weather, extra cooling package, just great trucks. that's my thought, now Obama not so good.

[kscarbel2]

If you ever have the chance to use a MAN truck you will like them, well built and all kinds of cool stuff to work with, had them in Iraq, loved them. used them in other places too, but they performed really good in the hot weather, extra cooling package, just great trucks. that's my thought, now Obama not so good.

Agreed, MAN produces a first-rate heavy truck. But it's expensive, like Mercedes-Benz, because of the high costs of German labor (double that of U.S.) thanks to the works councils (union), and the higher-than-the-global-norm number of employees at its German plants. This is alike why the VW brand is barely breaking even while Toyota and Hyundai see 8 to 9 percent margins.