"Capacity Adjusted"

Plants Closed: Auto Supplier Cut 800 Jobs

Polytec, headquartered in Hörsching (Upper Austria), is a supplier to the automotive industry.(Bild: Markus Wenzel)

Automotive supplier Polytec, based in Hörsching (Upper Austria), has cut 800 jobs—through the sale and closure of two plants, as well as additional efficiency measures. “This is how we’ve adjusted our capacity to meet demand,” the CFO told the “Krone.” The company now aims to become less dependent on the auto industry.

Job cuts at the Upper Austrian automotive supplier Polytec: The company has eliminated approximately 800 of its previous 3,600 jobs worldwide. About 350 jobs were lost due to the sale of its UK facility in December of last year, and slightly more than 200 employees were laid off when Polytec closed its plant in Weierbach, Germany, at the end of April. The remaining approximately 250 jobs were eliminated through “optimization measures,” as the company put it. In Austria, the company employs about 480 people.

“It’s important not to stand idly by”
The supplier company Polytec thus epitomizes the crisis in the auto industry. “It’s very challenging, but we’ve already come to terms with it,” says CFO Markus Mühlböck in an interview with “Krone.” “The important thing is to respond to the changes and not stand idly by.” That’s what the company did with the sale and closure of the two plants, “thereby adjusting our capacity to meet demand,” Mühlböck said.

It’s important to respond to the changes and not just stand idly by.

Markus Mühlböck, Polytec-Finanzvorstand

Bild: Polytec

Revenue Plunged by a Fifth
This “adjustment” is also reflected in the first-half results that Polytec presented on Thursday: Revenue fell by just under 20 percent to 287.4 million euros. “We have lower but more profitable revenue,” said CFO Mühlböck. At the same time, operating income rose from 5.6 to 8.3 million euros, and net income climbed from 1.4 million to 4.7 million euros.

Polytec Aims to Become Less Dependent on the Auto Industry
In the future, the company aims to become less dependent on the struggling automotive industry. Currently, revenue from non-automotive business—Polytec also develops plastic solutions for reusable logistics—accounts for about seven percent and is primarily attributable to a single customer. Over the next two to three years, this revenue share is expected to rise to around 30 percent. Mühlböck sees “a major opportunity for our products” in the legal changes regarding packaging. However, Polytec intends to continue generating the remaining 70 percent of its revenue in the automotive sector: “We are an automotive supplier and want to remain one,” says the CFO.

Mühlböck calls on policymakers to “not dictate technology, but to leave that to the market.” He also advocates for less regulation, as this imposes high administrative costs on small and medium-sized enterprises like Polytec.