Automotive supplier Mann + Hummel is cutting jobs as part of a restructuring program to improve its competitiveness.
The German group, which makes filtration systems and other under-the-hood auto parts, said sales increased 9 percent during its 2015 financial year to 3.04 billion ($3.3 billion), largely due to currency effects. But earnings before interest and taxes (EBIT) fell from 150 million euros ($165.5 million) in 2014 to 135 million euros ($148.9 million) in 2015.
Mann + Hummel said that “two special effects, the restructuring of [our] German plants and the acquisition of the filtration business of the Affinia Group, served to considerably impair earnings.”
The group's restructuring has recently involved combining strengths in business divisions and systematically oriented the production plants in Germany to the company's core strengths in order to improve competitiveness. Around 120 job cuts were announced at the headquarters in Ludwigsburg, Baden Württemberg, Germany, in late June.
Group CEO Alfred Weber said: "We have unfortunately been unable to avoid some compulsory redundancies. Each redundancy is one too many and is painful for us."
Mann + Hummel took over Affinia Group's filtration business in the U.S. in May. Its WIX Filters and Filtron brands are positioned in certain regions and market segments where Mann + Hummel has up to now only had a low penetration, including the areas of heavy duty applications in the U.S. and hydraulic filtration.
Weber said the takeover “fits in perfectly with our group strategy." Mann + Hummel's sales are set to rise by almost a third to 4 billion euros ($4.4 billion) following the takeover. In future the group will have 20,000 employees at more than 70 production locations.
Mann + Hummel also opened a new technology center at its Ludwigsburg, Germany, headquarters July 1, shortly after announcing the 120 job cuts.
The tech center, built at a cost of 30 million euros ($33.1 million), occupies an area of 24,000 square meters and includes research and laboratory facilities and a new company museum. There will be 450 employees located at the site.
In his speech at the opening, Weber referred to the layoffs and acknowledged that the inauguration of the technology center was taking place in difficult times. While regretting the redundancies, he emphasized the future importance of the new technology center: "The technology center is an important investment for the company which will sustainably strengthen our competitiveness. This facility will be the birthplace of innovation and ideas which will help the company to progress for at least another 75 years."