OHRINGEN, Germany—Freudenberg Sealing Technologies is restructuring its liquid silicone business.
The firm said in a news release that it intends to relocate production from Ohringen to Losenstein, Austria, by the middle of 2017. The tooling plant located at Ohringen will remain at the site.
Employees at Ohringen were notified on Oct. 14 about the measures being taken in a special meeting. The firm's release said Freudenberg will discuss plans and develop solutions with employee representatives.
Ohringen employs about 140, Freudenberg said.
The consolidation of the two sites combines Freudenberg's thermoplastic seals used in the automotive sector with liquid silicone production used in various industrial segments.
A Freudenberg spokesman said in an email that revenue at Ohringen has been decreasing since 2008 and showing no significant growth. The sales trend from recent years has been highly volatile, stagnating or declining despite price increases.
The firm also cited high labor and energy costs in Ohringen compared to those in Losenstein. Its release said payroll expenditure accounted for 30 percent of Ohringen's total costs and that energy consumption costs are about 40 percent higher than those in Losenstein. Freudenberg said both can be reduced significantly through the planned relocation.
“The planned manufacturing consolidation at the site in Losenstein ensures a stable, cost-effective structure for the future,” the spokesman said. “This will lead to a better utilization of equipment and to cost savings.”
Freudenberg is present in more than 30 market segments, employing more than 40,000 in 60 countries with sales of more than $7.73 billion.