AGC Glass Europe communicated that on February 9 2022, AGC Automotive Belgium informed its works council of its intention to close the site in Fleurus, Belgium. The plant currently employs 187 workers. Solutions will be studied to minimize the social impact.
AGC Automotive Belgium is part of the South & West Cluster of the Group’s Automotive Division and manufactures laminated glass for the European automotive sector.
In a very difficult market context, AGC had announced in September 2021 an intention to make 40 workers redundant at the Fleurus site. The aim of this restructuring was to adapt the organization of the plant to the foreseeable drop in its production level caused by the lack of new models nomination for the coming years. A number of reflections had been initiated, also involving the trade union representatives.
Unfortunately, the overall situation of AGC’s Automotive business in Europe has deteriorated further over the last few months.
Given the combined difficulties, the savings opportunities for the Fleurus plant, both in fixed and variable costs – opportunities that could have led to new models allocation or new investments – will not allow the site to recover from its chronically loss-making situation.
The same day, February 9 2022, the Top Management of AGC Glass Germany GmbH informed its local works council of its intention to stop production activities in the Wegberg Plant, Germany.
This restructuring plan would entail the dismissal of 84 people within the next 2 years (2022-2023), including permanent and temporary contracts, white and blue collars employees dedicated to these production activities. Other staff employed by AGC Glass Germany GmbH would not be impacted.
The Automotive sector is under unprecedented pressure with potential consequences on capacity utilization.
For several years, the automotive market has been under permanent pressure (uncertainty about engine technology, new competitors emergence, Chinese importations, Covid pandemic, semiconductors, energy and raw material price crises). AGC Automotive (OEM Central Cluster) is facing difficulties to effectively saturate its plants and quickly adjust its costs structure to remain competitive and profitable in such an economical and market environment. Furthermore, the Cluster production capacities no longer match its customers’ footprint.
A reorganization is essential to the survival of the business. Production and Fixed Costs within the OEM Central Cluster unit must be reduced to:
- Compensate the drop in volumes and reduce financial losses to effectively utilize capacity within Central Europe.
- Be able to achieve the highest production flexibility required by customers within the smallest market proportion.
- Reduce the expected financial losses for the years 2022-2023 and try to ensure long-term survival by attracting new models in a new and ever more competitive environment.
A social plan, as well as the related support measures, will be negotiated with the various partners concerned.