KSM Castings Group: Collective bargaining parties agree on a collective restructuring agreement
• IG-Metall members approve the results of the negotiations by a large majority
• Guarantee of location and exclusion of operational redundancies
• Important milestone in the ongoing protective shielding process
• Commitments for strategic investments, especially in the area of e-mobility
Hildesheim, November 19, 2020: After the representatives of the bargaining parties had already agreed on the key points of a new restructuring collective agreement on November 12 after long and intensive negotiations, the IG Metall members of all four German sites have now also agreed with the negotiated compromise. This clears the way for a new reorganization collective agreement at KSM Castings Group GmbH, one of the leading automotive suppliers of lightweight aluminum and magnesium cast components for chassis, transmissions and engines. The collective reorganization agreement is an important element of the restructuring concept with which the company intends to reposition itself in Germany and return to sustainable competitiveness under the new market conditions.
Term of five years
The negotiated compromise includes location guarantees for all four German operating sites in Hildesheim, Radevormwald, Wuppertal and Wernigerode. After the planned reduction of 328 jobs, which will be spread over several months, redundancies for operational reasons are ruled out. Part of the job cuts will already be achieved by the expiry of temporary employment contracts. All employees affected by the cutbacks will have the opportunity to switch to a transfer company with a consulting, qualification and placement service for up to 12 months.
Depending on the location, the agreement includes an annual wage waiver of between 8 and 10 % gross or 3-5% net in the next two years – with a staggered reduction in the following years – which is mainly achieved by reducing special payments, bonuses and allowances. Half of the operating profits in the years 2022 to 2025, which are higher than planned, will be distributed to the employees.
“With the salary waiver, our employees are making a very important contribution to putting KSM back on a sustainable growth path,“ says Dr. Zhihua Zhu, CEO of KSM Castings Group. “The workforce deserves our thanks for this. With the reorganization collective agreement we can secure the remaining jobs and give our employees a long-term perspective“.
Strategic investments in future technology
KSM shareholder CITIC DICASTAL has committed to investments of EUR 95.1 million over the next five years. This is intended to promote strategic investments in future technology areas such as e-mobility in particular. The investments are intended to strengthen the competitiveness of KSM‘s German locations in the long term. “As an automotive supplier, we have to adapt to the changed market conditions – this applies to the current transformation of the entire automotive industry as well as to the still ongoing COVID 19 pandemic,“ said Dr. Zhihua Zhu. “With the restructuring program, we have the opportunity to set the course for KSM to emerge from the protective shielding process stronger than before. And we can now seize this opportunity“.
Protective shielding process on the right track
The conclusion of a new reorganization collective agreement is part of the insolvency plan which the company had submitted to the Hildesheim District Court as part of the protective umbrella proceedings. On November 26, 2020, the creditors‘ meeting will have a final discussion on the insolvency plan. If the creditors‘ meeting agrees, the protective shield procedure could be successfully concluded in a few weeks.
About KSM Castings Group GmbH
KSM Castings Group GmbH is one of the leading automotive suppliers of lightweight aluminum and magnesium cast components for chassis, transmissions and engines. KSM Castings Group GmbH employs around 2,350 people at five production sites in Germany and the Czech Republic. Customers include automobile manufacturers and OEM suppliers such as Volkswagen, Daimler AG, BWM, ZF, Benteler and Bosch. In 2019, the company generated sales of 360 million euros.