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UPDATE 1-Finland's Valmet Automotive to cut 230 German jobs
June 3, 2014 / 3:07 PM / 4 years ago

UPDATE 1-Finland's Valmet Automotive to cut 230 German jobs

* Valmet to keep 100 jobs at Osnabrueck plant

* Production of roof systems to be based at Zary, Poland

* IG Metall union calls for crisis talks with Valmet (Adds union letter to Valmet executives)

BERLIN, June 3 (Reuters) - Finnish auto supplier Valmet Automotive will cut about two thirds of its staff in Germany and move production of retractable roof systems for convertible cars to lower-wage Poland.

Valmet, owned by the Finnish state, engineering group Metso and private equity fund Pontos Group, will cut 230 jobs and keep about 100 white-collar staff at its German plant in Osnabrueck, the company said late on Monday.

Assembly of roof systems for carmakers including Daimler , BMW and Volkswagen’s Bentley division will be based in Zary, western Poland, where Valmet employs 350 workers.

“Utilisation of two facilities is currently not feasible because of the decline of the market for convertible roof systems,” Martina Lupberger, senior vice president at Valmet’s German division said.

Demand for convertibles has been in steady decline since the 2008-9 economic crisis, said Mario Franjicevic, Frankfurt-based analyst with research firm IHS Automotive.

“Convertibles used to be second cars in most households, but people nowadays wonder if they need a car at all,” he said.

The latest job cuts follow the removal of 70 other positions at the German site in recent months through voluntary redundancies and natural wastage.

Other manufacturers are also seeking to benefit from low Polish production costs. VW will spend nearly 3.4 billion zlotys ($1.12 billion) on a new Polish factory to build delivery vans from 2016, ending assembly in Germany.

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.

German union IG Metall protested against the job cuts in an open letter sent to Valmet executives in Finland on Tuesday and demanded the firm’s chief operating officer attend crisis talks with staff representatives on June 11.

“Given the dramatic situation at Valmet Osnabrueck, what we urgently need is a management that’s able to put the company back on track,” Valmet works council chief Lazar Kustudic said. ($1 = 3.0420 Polish Zlotys) (Reporting by Andreas Cremer; Additional reporting by Jussi Rosendahl in Helsinki; Editing by Erica Billingham)

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