The interim manager took on responsibility for the restructuring and reorganization of one of the two sites in southwest Germany for a mechanical and plant engineering company. One of the main tasks was to adjust the number of employees to the current scope of business.
Restructuring plan developed with spin-offs and mergers
The scope of business at the site had been declining for years. For the past 6 years, the parent company has had to compensate for annual losses of between €2 and €3.5 million via a profit and loss transfer agreement. The main reasons for the losses were many years of neglecting the product range, inefficient innovation and project management, unresolved process and organizational problems and inadequate communication with existing customers.
The interim manager worked with the managers to develop a restructuring plan that focused on four main areas:
- Relocate production and assembly as far as possible to sister companies in countries with significantly lower wages
- Merge the site's spare parts warehouse with the parent company's spare parts warehouse
- Concentrate the commercial area at one site
- Reduce the number of employees from more than 200 to almost 130.
Negotiations on reconciliation of interests, social plan and transfer company
The negotiations with the works council and the trade union got off to a difficult start. This was partly due to the fact that frequently changing management teams had regularly emphasized in recent years that the site and its workforce were not up for discussion, regardless of the overall business development. It turned out to be a difficult hurdle to overcome to get the works council to agree on the grounds that the shareholder was no longer prepared to cover the annual losses.
Works council refuses to reach an internal agreement - conciliation committee called in
The intended staff reduction amounted to 70 employees. 20 of them were to leave the company via an early voluntary redundancy program, including early retirement financed by the employer. There were also plans to lay off 50 employees for operational reasons. The works council, on the other hand, demanded a continued - and socially questionable - short-time working arrangement instead of the comprehensive restructuring of the site. This fundamental disagreement could not be resolved by legal opinions regarding the short-time working arrangement sought by the works council.
Client postpones decision on the specific way to reduce the workforce
As it was not possible to reach an agreement within the company, the route via the conciliation committee had to be chosen. The interim manager derived the necessary documents from the concepts prepared for the internal agreement (reconciliation of interests and social plan). On this basis, the conciliation board confirmed the comprehensibility of the company's decision to reduce staff by means of a reconciliation of interests. The employer then decided to implement the intended staff reduction in a different way. At the end of the mandate, these plans had not yet been completed.
