Webasto Faces Expansion Challenges Amid Financial Restructuring
Webasto, an automotive supplier based in Starnberg, is grappling with significant financial hurdles, prompting the company to bring in external expertise to guide its restructuring efforts. The family-owned business has enlisted Johann Stohner from Alvarez & Marsal to serve as Chief Restructuring Officer, a move that indicates a shift in governance as he joins the board, potentially limiting the authority of the current CEO, Holger Engelmann.
The company, which specializes in manufacturing components such as heating systems, sunroofs, and products for electric mobility, had previously initiated a cost-saving plan that involved a reduction of approximately 10% of its workforce, which totals around 16,600 employees. Despite these efforts, Engelmann acknowledged that the conditions within the automotive sector have deteriorated considerably over the past year.
As of late 2023, Webasto reported debts nearing one billion euros, which has compounded its financial struggles. Recently, the company secured a stabilizing agreement with creditors and insurers to ensure ongoing financial support. This agreement is intended to provide a temporary financial cushion until May 31, 2025. Concurrently, Webasto is working on a comprehensive restructuring strategy, with a detailed assessment expected by the end of March.
The automotive supplier has made substantial investments in transitioning to electric mobility, including the establishment of battery production facilities in locations such as Bavaria, Slovakia, and South Korea. However, the company now faces challenges due to the broader economic downturn, slower-than-anticipated growth in electric vehicle adoption, and increasing competition from Chinese manufacturers. Suppliers like Webasto often experience greater difficulties than automotive manufacturers during industry downturns.
Major players in the automotive supply chain, including Continental, Bosch, ZF, and Schaeffler, are also navigating their own financial difficulties, prompting many to implement cost-cutting measures. In response to its financial losses, Webasto closed two of its factories in China in late 2023 and announced plans to eliminate 1,600 jobs.
Looking ahead, the restructuring team, along with the company's management and the workers' council, aims to develop additional cost-saving strategies by the beginning of the second quarter of 2025. The specifics of these measures, including any potential further job cuts, remain uncertain as the company continues to evaluate its financial landscape.
