Schaeffler and Valeo Cut European Jobs, Plants as BEV Sales Slowdown Bites

Two major European automotive suppliers reacting to slowdown in orders for automakers by slashing jobs and closing plants on the Continent.

Germany’s Schaeffler announces 4,700 job cuts and the closure of factories in Germany, Austria and the U.K. Meanwhile, Valeo also slashes its workforce numbers by 1,000 roles with both companies citing the ongoing industrial headwinds facing European manufacturers caught in the twin challenges of a consumer cost-of-living crisis and increasing competition from cheaper imported Chinese autos.

Schaeffler’s cuts include closing plants in Germany, Austria and U.K. as BEV sales slow down and automaker’s reduce production outputs.

The company says its production relocations plans will reduce the net loss to about 3,700 jobs, which corresponds to about 3.1% of the total headcount.

Downsizing will affect 10 locations in Germany and locations elsewhere in Europe with exact plants be announced by the end of the year. The company intends to implement the majority of the measures over the period from 2025 to 2027.

Regensburg will become the headquarters of powertrain solutions within the powertrain and chassis division. The headquarters of Schaeffler’s new E-Mobility division will be in Herzogenaurach, which will continue to be the location of the group’s corporate headquarters.

Schaeffler chief executive officer Klaus Rosenfeld, says: “By taking the measures announced today we will tackle three issues. Firstly, we will get our bearings and industrial business back on track. Secondly, we will realize cost synergies from the merger with Vitesco Technologies [in October 2024]. And thirdly, we will continue the transformation of our powertrain and chassis and E-Mobility divisions. Given the current business environment, this program is necessary to safeguard the Schaeffler Group’s competitiveness over the long term. We will implement it in a socially equitable and carefully considered manner.”

Meanwhile French car parts supplier Valeo will cut about 1,000 jobs in Europe and restructuring sees the company closing two sites in France, sources tell Reuters news agency.

The job cuts will impact more than 800 workers in France, while Valeo will also cut staff at operations in Germany, Poland and the Czech Republic.

These moves are also being attributed to the BEV slowdown in consumer demand affecting European automakers plus competition from Chinese rivals importing cheaper vehicles.