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© Paragon Business | March 20, 2020

paragon reacts to production stoppages by carmakers

paragon is set to take immediate action in response to moves by automotive manufacturers closing down their plants. The company is now reducing production at its automotive manufacturing sites in Germany to a minimum for the time being.

In order to minimise the impact of the looming coronavirus pandemic on employees and the company to the greatest extent possible, the company has submitted an application for a shorter working hours model within paragon Automotive. “As the news is changing by the hour and it is difficult to estimate how the situation will develop for the company’s customers, it is currently impossible to predict what the impact on revenue and earnings forecasts will be,” the company writes in a press release. paragon Automotive had made a good start to the year; revenue rose by 10% in January and was still 2% ahead of the prior-year figure in February. The company had managed to maintain its supply chains despite the coronavirus crisis and also to keep its business operations running by taking measures in response to the crisis. But as reports started to come in from its customers this week, revealing that they would be closing their plants across Germany for several weeks and would no longer be purchasing any goods, the paragon management team had no other option but to halt its own production in line with these moves. The production stoppage at paragon will affect six plants located in Suhl (Thuringia), Landsberg am Lech and Neu-Ulm (Bavaria), Delbrück (North Rhine-Westphalia), St. Georgen (Baden-Württemberg) and Limbach (Saarland). Development and administrative departments will also adopt shorter working hours models proportionately. “We are taking these drastic measures in an effort to save every single job. The unforeseeable events are hitting countless other suppliers, impacting the industry as a whole,” says founder Klaus Dieter Frers, in a press release. He continues saying that paragon is very well positioned for the future; “the coronavirus crisis doesn’t invalidate a strategy that has proved to be the right course of action in the past.” So far, paragon had only suffered a slight loss of revenue due to the temporary shutdown of its Chinese plant in Kunshan. The market in China is now gradually bouncing back. The company currently expects to be able to resume production in mid-April, although this obviously depends on suppliers being in a position to deliver and on the company’s customers resuming production.
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March 27 2020 12:33 pm V18.4.17-1