Germany: bankruptcies follow one another in the auto sector
The German auto sector is increasingly in crisis, and this can also be seen from the list of cuts and bankruptcies in the sector. After VW announced the closure of one or more factories in Germany and the bankruptcy of Varta and Recaro , essential but smaller companies are also going down.
Specifically, after various insolvencies of automotive suppliers in Bavaria and Hesse this year, this is the Erwin Lutz spring factory based in Eningen unter Achalm near Reutlingen in Baden-Württemberg.
The Erwin Lutz spring factory initiates insolvency proceedings
As reported by s wp.de and gea.de among others, the supplier for the automotive and mechanical engineering industries has filed an application to open insolvency proceedings at the Tübingen District Court.
As can be seen from the insolvency notices, the application was accepted on August 9 by the district court and the Reutlingen lawyer Jürgen Sulz was appointed provisional insolvency administrator.
The Eningen spring factory, founded in 1966 by Erwin Lutz, previously a representative at Vogt, a hygiene products wholesaler from Reutlingen, specializes in the production of technical springs and bent parts. The assortment of the insolvent automotive supplier includes different types of springs such as compression springs, tension springs, torsion springs, bent wire parts and special components such as leaf springs and magazine springs. Such components are used, among other things, in the automotive industry and mechanical engineering, both of which are currently in difficulty. This is also highlighted by the insolvencies of another automotive supplier, a traditional supplier to the automotive industry, and the renewed insolvency of a German world market leader in mechanical engineering.
The German automotive supplier has to declare bankruptcy: all employees had previously been fired
The reason for the failure of the Erwin Lutz spring factory appears to be the current imbalance in the industry. “The company Federnfabrik Lutz is struggling with a significant drop in sales,” the administrator explained, when asked by Südwest Presse (SWP), the reasons for the insolvency of the car supplier. At the request of the Reutlinger Generalanzeiger (GEA), Sulz explained. “Customers in the automotive and mechanical engineering industries have recently received little from large framework agreements.”
The automotive supplier with a history spanning almost 60 years had already had to announce bad news to employees. Reutlingen's lawyer confirmed to the SWP that the decision to close the factory had already been taken before the request to open insolvency proceedings and that all 20 employees had received notice of termination.
Baden-Württemberg car supplier is insolvent: Employees receive wages through insolvency compensation
Although the plant of the insolvent automotive supplier from Baden-Württemberg appears to be closing, the business is currently continuing under insolvency proceedings. “Employees receive their salary through insolvency compensation. This has already been pre-funded for the months of July and August 2024 and paid out to employees,” explains Sulz at SWP .
According to the provisional bankruptcy trustee, the spring factory, including the company property, previously managed by the heirs of Erwin Lutz, was sold in mid-2022. As can be seen from the imprint on the homepage, the company has since been represented by Tobias Ulrich and Tanja Knörzer.
Permanent closure?
Since all previous employees have been fired, it is reasonable to assume that the Eningen spring factory will be completely liquidated or completely restarted following the insolvency proceedings. However, the administrator has not yet made any statement on the insolvent automotive supplier's future plans.
However, the recent insolvency is part of a trend that has been clearly observed, especially in Germany, since the beginning of the year. According to a current analysis by business consultancy firm Falkensteg, available to IPPEN.MEDIA , the number of large bankruptcies increased by 41% in the first half of 2024 compared to the same period last year. Things aren't necessarily getting any better internationally either. A well-known motorsport empire is also insolvent and has over a billion in debt .
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The article Germany: bankruptcies follow one another in the auto sector comes from Scenari Economici .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/germania-fallimenti-si-susseguono-nel-settore-auto/ on Sat, 14 Sep 2024 12:32:13 +0000.