DGAP-Adhoc: Progress-Werk Oberkirch AG: PWO expands cost-cutting program at Oberkirch site to include personnel measures

- Structural changes in the automotive industry and corona crisis require a reduction of 150 to 200 employees
- The program is estimated to require personnel expenses of EUR 10 million in the current fiscal year
- Savings of around EUR 12 million are targeted starting in fiscal year 2021

Oberkirch, October 6, 2020 - The global automotive industry is currently undergoing a fundamental structural change. As a result, this industry is being particularly hard hit by the corona crisis. Despite a recent upturn in demand, the uncertainty concerning the further course of the pandemic and the ensuing deterioration in the economic situation remains high. Moreover, economic researchers expect to see only a slow recovery in the market and in sales in the years ahead, which means that the structural underutilization of capacities can be expected to persist for a longer period of time.

At today's meeting, PWO's Management Board therefore decided to add personnel measures to the existing cost-cutting program at the Oberkirch site. The plan is to reduce the number of employees at this location by 150 to 200 people in fiscal year 2020. This measure is intended to reduce annual staff costs by around EUR 12 million as early as fiscal year 2021. Reductions are to be made in all areas of the location and will result in estimated personnel expenses of EUR 10 million in the current fiscal year.

In 2020, the plan is to reduce the number of employees, initially within the scope of a voluntary program. The Oberkirch location is still covered by a supplementary collective agreement, which includes employment protection, until December 31, 2020. As of January 2021, redundancies will need to be made for operational reasons if the savings targets have not yet been achieved. The Management Board is striving to implement these measures in the most socially responsible manner possible in coordination with the employee representatives. The agreements with the works council required for the introduction of the measures are to be concluded promptly; negotiations on this have already begun.

In view of the economic situation, these savings at the Oberkirch site are urgently needed in addition to the continued full utilization of the temporary measures already in place. Overall, these actions are aimed at securing the location's future viability and strengthening its long-term competitiveness. The effectiveness of these measures will be reviewed on an ongoing basis, and the Management Board will make adjustments where necessary, depending on further developments.

Progress-Werk Oberkirch AG
The Management Board
End of the ad hoc announcement