About 240 employees at Grammer AG will lose their jobs this year, according to an agreement signed between the company and its works council.

Negotiations started last year between Grammer's executive board and the works council regarding changes to production structures and employee numbers at the Haselmühl plant, as well as cost reductions in the company. The two parties have just concluded their discussions.

Of the job cuts, 180 affect the Haselmühl plant while a further 60 positions will be eliminated in "mainly sales, logistics, production planning and other areas", says Grammer spokesman Ralf Hoppe.

Since May 2009, the Haselmühl plant in Amberg has been particularly hard hit by the declining order and revenue volumes that have impacted the whole company. The facility specialises in the manufacturing and sales of seats for forklifts, tractors and construction machines. It has suffered a drop of about 50% in orders since the second quarter of 2009 (Forkliftaction.com News #421).

However, Hoppe says there is "a stabilisation and slight positive development" for Grammer's automotive business, while the seating business "has also somewhat stabilised but on a very low level".

"We do not expect significant market rebound in the seating segment, especially for tractors, forklifts and trucks," he adds.

Grammer AG and the works council have agreed on severance package payments and the establishment of a temporary transfer company for employees affected by job cuts.

"If you choose to join the transfer company (instead of a severance payment), you will be trained and supported by a professional team to prepare for job interviews and applications," Hoppe says.

He explains that the transfer company will "employ" its members and pay them for a period of six to 12 months, depending on the employee's age. The company is funded by Grammer and the German government.

The works council is a group of employees elected by a German company's employees to represent them. Workers' unions support work councils and the majority of council members are usually also union members.

Grammer AG develops and produces components and systems for automotive interiors, and driver and passenger seats for off-road vehicles, trucks, buses and trains. In 2008, Grammer AG achieved EUR10.007 billion (USD14.198 billion) in revenue, EBIT of EUR32 million (USD45.4 million) and a net profit of EUR14 million (USD19.9 million). It employs about 7,200 people in 17 countries.