The supply chain problems triggered by the war in Ukraine exacerbated the earnings and liquidity crisis at a medium-sized automotive supplier that was already under pressure following the coronavirus and chip crisis. This jeopardized the existence of the company. The managing director commissioned the HR Interim Manager to reduce costs sustainably by cutting personnel costs.
4-day week with 30 working hours presented as a solution
The company had already responded to the challenges posed by coronavirus and chip shortages by introducing short-time working. Due to the further deterioration in sales figures in the automotive industry, the supplier was facing a medium-term staff surplus. The task now was to realize further cost reductions in other ways. After the interim manager had drawn up an initial medium-term personnel plan, he agreed with the employer:
- In the short term, the promotion of short-time working and the payment of short-time working benefits without top-up by the employer
- The termination of all agency and temporary employment contracts as well as the termination of fixed-term employment contracts as short-term instruments
- In the medium term (from 2023), the introduction of a 30-hour week (instead of 35 hours).
Works council convinced of 4-day week after initial resistance
After coordinating with the employer, the interim manager negotiated possible solutions with the employee representatives. The works council quickly agreed to the promotion of short-time working without an increase and the other short-term measures. However, it initially put up considerable resistance to the reduction in working hours. The medium-term staff surpluses were denied. Through a broad discussion of personnel planning, the interim manager succeeded in gaining the support of the workforce for a 4-day week with 30 working hours. In several rounds of negotiations, he finally convinced the works council and IG Metall. This was helped by the fact that the employer had threatened to enforce the 4-day and 30-hour week via conciliation proceedings if the talks failed. In the event of success, however, the company promised employment guarantees for the core workforce.
Working time models for the 30-hour week designed and negotiated
After the agreement was reached, the interim manager prepared working time models for the 30-hour week in the operational areas and cross-divisional functions. Together with the HR department, he conducted numerous employee interviews. This made a significant contribution to further improving acceptance of the reduction in working hours. The 4-day week as the basis for the 30-hour week and job security through a works agreement were increasingly viewed positively.
Reduction in personnel costs by 20 percent paves the way for restructuring
Financial planning now envisages a reduction in personnel costs of a good 20 percent by 2023. With this forecast, the restructuring negotiations with the banks and the shareholder have been successful. The company now has the opportunity to consolidate and generate new orders via sales to improve earnings.
