Ruwel insolvency: Investors cannot be found until the end of April

Ruwel GmbH had filed an insolvency petition on February 3. Ruwel’s main sales (58%) are with car component suppliers who are currently experiencing their worst crisis worldwide. In addition, Ruwel GmbH had been taken over in June 2006 by American financial investors who have been severely hit themselves by the global crisis in the financial world. In this difficult situation it was unacceptable for them to continue supporting Ruwel. The launched government relief programmes are only accessible through house banks which, however, Ruwel no longer has since the time the financial investors joined the company. In 2006, they had paid off all debts owed to the house banks at that time. The present restraint shown by commercial banks has made it impossible for Ruwel to find new house banks. Until January inclusive, the salaries and wages of more than 600 employees in Geldern and Pfullingen have always been paid on time and in full, a fact that clearly distinguishes them from other current insolvencies in the German printed circuit board industry. Horst Piepenburg, a Düsseldorf lawyer, has been appointed provisional insolvency administrator. Even after commencement of insolvency proceedings leading supplier partners have promised to continue supporting Ruwel. Many loyal customers, some of whom have been customers for decades, have shown their interest in maintaining their partnership with Ruwel GmbH. Despite this filing of insolvency petition at a very early stage, no investor could unfortunately be found to this day, neither for a complete nor a partial solution to continue business activities. That is why Ruwel GmbH as the oldest established printed circuit board manufacturer in Europe had to enter into negotiations with the works council regarding layoffs. Until the end of April, the employees of Ruwel GmbH at the Geldern and Pfullingen sites will get their salaries as insolvency payments from the German employment office. The provisional insolvency administrator will suggest to the competent insolvency court to commence insolvency proceedings on May 01, 2009. From that date on, Ruwel GmbH will have to be able to defray all their costs themselves. As from May 1, the enterprise will not be allowed to sustain losses. On grounds of the ongoing crisis of the overall economy and particularly the automotive industry it will not be feasible to preserve the complete business activities under these conditions. Underused capacities, even in Asia, will further intensify competition. With the commencement of insolvency proceedings the insolvency administrator will therefore give notices of dismissal. However, production will continue for the time being in order to finish the existing orders. New orders recently placed by customers will also be manufactured then. With that, more than half of the workforce will continue to be employed even after May 1. The legal framework and the order book situation unfortunately leave no alternative choice with regard to these measures.