Car manufacturing sector - Preh, an automotive supplier, announces workforce reductions.
Following the news from Preh, an automotive supplier, that they plan to let go of 420 workers out of their 1700 workforce in their Lower Franconian site in Bad Neustadt an der Saale, Economic Minister Hubert Aiwanger (Free Voters) has announced his intentions to visit the area. He aims to discover new prospects for the impacted employees and the surrounding economy, said his ministry on Tuesday night. Their objective is not only to maintain the headquarters and development center, but also to secure the industrial structures and associated manufacturing expertise in Bad Neustadt.
Aiwanger expressed his sentiment in a statement, saying, "The job losses at Preh only intensify the issues in the region; these instances are accumulating. It's a harmful sign when a producer of parts for electric cars must dismiss staff." He added, "It's good that the Preh workforce benefits from socially acceptable layoffs, but it's unfortunate for the region when jobs are vanishing permanently, and that at a business that has been around for a century."
He further noted that a more strategic plan is needed to reduce carbon emissions in the transportation sector instead of the scheme the federal government is currently implementing. The demand for electric vehicles has dropped dramatically due to the sudden termination of funding. "If they had considered technological liberty from the start, it would be better for Bavaria's supplier industry." Aiwanger emphasized that Berlin and Brussels should prioritize the competitiveness of German companies, rather than imposing new regulations. "Without better circumstances and reduced costs, our production companies will not endure. To preserve competitiveness, we need to align ourselves with our European neighbors in terms of tax burdens and energy costs."
Meanwhile, Zhengxin Cai, the chairman, announced on Tuesday that the decrease in sales had accelerated significantly in the first quarter, particularly for components for electric vehicles. He added, "Our competitiveness is being harmed due to the high energy and labor costs in Germany." As a result of years of losses and temporary work, the company is now compelled to make major adjustments.
Thomas Höhn, the first representative of the works council in Schweinfurt, stated their opposition. "The events at Preh again show how immense the difficulties in the region are," he said. Preh is part of the Chinese Joyson Group, with approximately 7400 employees, and earned sales of 1.7 billion euros in the previous year.
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In light of Preh's decision to cut 420 jobs, Minister Hubert Aiwanger from Bavaria's Free Voters party plans to visit Bad Neustadt an der Saale to explore potential opportunities for the affected employees and the local economy. Germany's automotive industry, including companies like Preh, has been facing challenges, with Germany's Economic Minister calling for a more strategic approach to reduce carbon emissions in transportation. The drops in electric vehicle demand due to funding terminations have negatively impacted firms. Zhengxin Cai, Preh's chairman, acknowledged the company's struggles due to high energy and labor costs in Germany, leading to job cuts and major adjustments in the company's operations. Meanwhile, Thomas Höhn, the works council representative, voiced concerns over the impact of these job cuts on the region. The German automotive sector, particularly the automotive supplier Preh based in Bavaria, is currently facing significant challenges.
