Edscha insolvency: almost all German jobs are secure

"Almost all jobs at Edscha in Germany are secure for the time being", said Dr. Jörg Nerlich, temporary insolvency administrator for the Edscha Group. It was possible to save approximately 2,210 – around 96% – of the 2,300 jobs in Germany. Based on the currently good order backlog and a satisfactory intake of orders, the temporary insolvency administrator finds himself "in the fortunate position of not having to cut any jobs in production here in Germany." The approximately 90 jobs that will be eliminated affect the headquarters of the holding company in Remscheid (300 employees) and the Business Unit Convertible Roof Systems in Hengersberg (1,300 employees). However, the negotiations with the works council and the metalworkers' union IG Metall on this issue have not yet been concluded. At the locations Hauzenberg (400 employees) and Regensburg (300 employees), as things stand now no jobs will be cut. At the other European locations of the Edscha Group (1,900 employees in all), negotiations are in progress on possible staff reductions or reductions in weekly working hours with proportionate renunciation of pay. The results are not yet certain. "The aim of our restructuring concept was to preserve as many jobs as possible, which we have succeeded in doing," says Nerlich. However, minor adjustments of staffing levels unfortunately are unavoidable owing to the drastic declines in sales of the motor vehicle manufacturers, which make themselves directly felt at Edscha. "We will align the Edscha Group so that it is successfully positioned in the market for the long term. The prospects for achieving this are good." Results of investor process by late summer The purpose of restructuring is also to prepare Edscha for takeover by a new investor. Dr. Jörg Nerlich and the Management Board of Edscha currently are involved in intense negotiations with several potential investors who are interested both in Edscha as a whole and in the takeover of individual business units. They include financial investors and strategic investors. "We are right on schedule and are confident of reaching an agreement with one or more potential partners by late summer," says Dr. Nerlich. For the investor process an orderly bidding procedure was initiated. Once the insolvency administrator has convinced himself of the serious nature of the buying intentions, potential investors can get an exact picture of the figures, data and facts of the company in the course of due diligence. Edscha itself again generating wages and salaries When payment of the insolvency money ceases as of May, Edscha will again be able to pay the wages and salaries of the employees at the four German locations out of its own resources – this also applies to the wages and salaries of the employees affected by the insolvency in other European countries. At the beginning of May a decision is due by Wuppertal Local Court on the institution of insolvency proceedings. On February 2, 2009, the board of Edscha AG initiated insolvency proceedings for the European sites of the Edscha Group. Legal representative Dr. Jörg Nerlich from the law firm "Görg Rechtsanwälte" was appointed as the temporary insolvency administrator. The reasons for filing for insolvency were the massive declining trends in the global automobile market in combination with clearly deteriorating access to financing in the capital markets.