Joint statement by the Plant Management and Works Council at the Heidenheim site
Global competition in the market for passive electronic components in general – and for standard products in particular – is constantly increasing. Overcapacity and growing price pressure have shaped the course of business for years. In light of this situation, EPCOS will in the future focus its Heidenheim, Germany, site primarily on developing and launching new products. As a consequence, it is not possible to maintain the existing scope of volume production, and hence the size of the currently 590-strong workforce in Heidenheim.
To secure a viable economic outlook for this site, the Plant Management and the Works Council have agreed to reduce the headcount in Heidenheim by up to 140 employees. This headcount reduction is largely the result of the scheduled termination of tantalum capacitor production in 2006 following the sale of these business activities to KEMET. More than 30 EPCOS employees in Heidenheim are also being transferred to KEMET as a part of this transaction. In addition, the voluntary departure of more than 30 further employees is already certain. From a present perspective, therefore, the number of employees in Heidenheim will probably be reduced by more than 200 when all possible courses of action have been taken.
As part of the headcount reduction agreed upon in the reconciliation of interests, employment for 70 people will be terminated effective September 30, 2006. After that, a further 70 jobs may be cut depending on business development. A package of solutions has been agreed to minimize social hardship for the individuals affected. Up to 70 employees have the option of taking up work at EPCOS' SAW Components plant in Munich. EPCOS is also offering conditions for early retirement and cancellation contracts complete with severance pay. Another option is a move to an out-placement and training company. The aim is for the headcount reduction to proceed primarily on a voluntary basis, and to avoid terminations of employment for operational reasons wherever possible. Further terminations for operational reasons – above and beyond the 140 jobs referred to above – have been precluded until September 30, 2012. Additional personnel adjustments are possible on a voluntary basis.
"Throughout the intensive talks, both sides demonstrated a common interest in readying the Heidenheim site for the ever fiercer competition that affects the components industry in particular. And both sides made concessions," was the verdict announced by both Dr. Werner Faber, who led the negotiations on behalf of the EPCOS Management Board, and Ralf Willeck, Chairman of the Works Council in Heidenheim. "I am especially pleased that, apart from the agreed headcount reduction, we were able to prevent any further terminations for operational reasons between now and 2012," Willeck added. "For EPCOS and for the location, it was necessary to reduce our workforce by this amount," Dr. Faber noted. "Now we must press ahead, execute the negotiated outcome and focus resolutely on the future."
About EPCOS
EPCOS AG, a manufacturer of passive electronic components headquartered in Munich, is market leader in Europe and number two worldwide. EPCOS offers a comprehensive portfolio of about 40,000 different products. The EPCOS Group has design, manufacturing and marketing facilities in Europe, the Americas and Asia.
Passive electronic components are found in every electrical and electronic product – from automotive and industrial electronics through information and communications to consumer electronics. Components from EPCOS store electrical energy, select frequencies, and protect against overvoltage and overcurrent.
In fiscal 2005 (October 1, 2004, to September 30, 2005), EPCOS posted sales of EUR 1.24 billion. At September 30, 2005, the company employed about 16,100 people worldwide.
