DEUTZ AG has introduced a comprehensive action programme to deal with the effects of the global recession. Cost-cutting in all areas, productivity increases and adjustments to organisational structures all form part of the worldwide MOVE programme that enabled DEUTZ to improve its profitability by some €30 million by
the end of the first quarter of this year.
Early in the second half of last year DEUTZ was quick to respond to the first indications that demand for diesel engines fitted in con-struction equipment, commercial vehicles and gensets was falling.
It immediately reduced the number of temporary staff and employees on fixed-term contracts and imposed a hiring freeze throughout the Company. Only the development department, which is of particular strategic importance, was spared these cuts. The Company has supplemented these measures by offering employees over the age of 60 the option of taking early retirement and receiving financial compensation for any consequent loss of pension entitlements. Since it launched its MOVE action pro-gramme, DEUTZ AG has therefore managed to reduce its total workforce by roughly 1,000 jobs – or 19 per cent – in a way that minimises any adverse impact on its staff. The number of jobs in Germany has been cut by 700, or 17 per cent, while DEUTZ has reduced headcount at its North American and non-German European sites, which have been hit particularly hard by the re-cession, by 300 jobs (25 per cent).
Short-time working provides the Company with an additional way of effectively reducing its workforce. This flexible strategy has been extensively used at DEUTZ's German sites since the end of 2008 in its production units and since the beginning of this year in its administrative functions as well. Some 85 per cent of the 3,500 or so people employed at its German sites have been put on short-time working. The cost savings realised by this measure are, on average, equivalent to those that would be achieved by reducing the Company's headcount by roughly 500.
In recent months DEUTZ has taken further measures to improve efficiency, especially in its administrative functions. In March it re-duced the number of people on its Board of Management from four to three and, at the beginning of this month, it cut the number of functions at the top level of senior management by more than 30 per cent worldwide.
This means that DEUTZ is now ready to implement the next stage of its MOVE programme. "The efficiency improvements in our pro-cesses and procedures will enable us to lower our fixed costs even further and achieve a lasting reduction in our break-even point", stressed Dr Helmut Leube, chairman of the Board of Management. "To ensure that we meet this objective, we are conducting negotiations with the Company's works council on the possibility of making further headcount adjustments at all levels. Our aim is to reduce our total workforce by a further 800 or so jobs worldwide."
