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CORRECTED-UPDATE 1-Finland's Valmet to cut 300 jobs in Germany -union
June 3, 2014 / 3:02 PM / 3 years ago

CORRECTED-UPDATE 1-Finland's Valmet to cut 300 jobs in Germany -union

(Corrects to remove Valmet Corp from list of owners in paragraph 5)

* Jobs may go to Poland or be cut over time -IG Metall

* Related cuts may push layoffs above 900 -IG Metall

* Valmet declined to comment

BERLIN, June 2 (Reuters) - Finnish auto supplier Valmet Automotive plans to cut 300 jobs in Germany because of dwindling demand for convertible cars, German union IG Metall said on Monday.

The maker of roof systems will eliminate all production jobs and some white-collar positions at a plant employing 400 people in Osnabrueck, western Germany, IG Metall’s regional director Stephan Soldanski said.

Valmet will either transfer jobs immediately to low-wage Poland or gradually phase out the positions through 2017, Soldanski said, citing a staff briefing by company managers on Monday.

“Workers will pay the price for home-made problems and the market situation,” Soldanski told Reuters.

Shifting production to Poland would allow Valmet, which is owned by Finnish engineering group Metso, private equity fund Pontos Group and the Finnish state, to reduce production costs significantly.

Labour costs in Poland’s manufacturing sector amounted to an hourly 6.65 euros per worker in 2012, about a sixth of the 36.98 euros in Germany, according to the Cologne-based IW economic institute.

IG Metall said that once job cuts in related businesses are taken into account, layoffs in Osnabrueck - a northwestern town of 165,000 people - could exceed 900.

Valmet, which acquired the roof-making business from German contract carmaker and cabriolet specialist Karmann in 2010 after the company had filed for insolvency, declined to comment on Monday.

Europe’s largest automotive group Volkswagen currently builds the drop-top version of its best-selling Golf hatchback at a separate plant in Osnabrueck. The plant, which employs 1,900, also assembles Porsche sports cars.

Reporting by Andreas Cremer; Additional reporting by Jussi Rosendahl in Helsinki; Editing by David Goodman

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