Social plan negotiations at Saarschmiede: Socially responsible workforce adjustment – A large proportion of employees will remain within the Saarstahl group

05. December 2017

Völklingen, 4 December 2017 – The management and employee representatives of Saarschmiede GmbH Freiformschmiede (Saarschmiede) have concluded a works agreement/social plan for workforce adjustment as of 1 January 2018. The agreement has been made against the background of a decision taken in autumn to restructure the production capacity and facilities due to a lack of capacity utilisation and, in connection with this, to reduce the workforce of 850 employees by approximately half.

“Before the negotiations, we announced that we would take the social concerns of our workforce into account. We have succeeded in doing this. Saarstahl has put every effort into this process and has assumed its responsibility of keeping as many employees as possible within the Saarstahl group”, explained Managing Director Peter Schweda. He continued: “The aim is to avoid forced redundancies”.

In total, more employees than initially planned can be transferred within the group thus giving them new, secure prospects at Saarstahl. The more than 300 vacant posts which are currently available have come about due to a voluntary severance offer for employees throughout the Völklingen location and an attractive offer for semi-retirement. Furthermore, due to the continuing positive economic situation within the parent company Saarstahl, and in the light of the situation at the forge, vacancies have been kept unfilled at Saarstahl as a precautionary measure.

“I am very glad that we have been able to conquer this huge task so well since we know that changes always result in cutbacks for each individual that need to be dealt with. I would like to express my thanks to the Human Resources departments at Saarschmiede and Saarstahl who put in a lot of extra shifts to answer their colleagues’ questions. I would also like to thank the works' council who carried out hard, fair and constructive negotiations and who supported the resolutions”, Schweda concluded.

With the leaner product portfolio and reduced workforce, the prerequisites have been created for the company to make a fresh start within an economic environment which remains challenging.

Review of the general market situation and the company situation:

Saarschmiede was hit by the full force and ongoing dramatic consequences of the Fukushima catastrophe and the change in energy policies which was subsequently implemented. The energy market has completely changed worldwide and the change in energy policies was driven ahead at high speed in Germany.

The situation has also worsened as a result of the continuing low prices for gas and oil. There has been and still is postponement or complete cancellation of investments in power plants, above all, in those using fossil fuel with a high level of efficiency and therefore in such highly technical and efficient products as Saarschmiede can produce them (such as high performance turbine shafts which allow a maximum degree of energy efficiency).

All of the measures carried out by the company so far for realignment and cost reduction have ultimately not been sufficient to reverse the loss situation. Since autumn 2016, the company has been working short time.