130-year-old German auto parts maker files for insolvency
German auto parts manufacturer Prinz & Co. GmbH Stahlrohre, with a 130-year history, has initiated insolvency proceedings. The company cites the automotive sector's general downturn and increased costs as primary reasons for its financial distress.
German automotive parts manufacturer Prinz & Co. GmbH Stahlrohre has begun formal insolvency proceedings. The company, established in 1896 and with 130 years of operation, announced the development to its employees on September 12. A local court officially commenced preliminary insolvency review on September 9.
The company specializes in the manufacturing and processing of precision steel tubes used in critical automotive components such as seat assemblies, dashboard supports, airbag mounts, and tailgate struts. According to the company, a general downturn in the automotive industry, coupled with soaring raw material and energy prices and high fixed costs, has created significant financial pressure. The firm experienced a sharp decline in revenue during the summer, leading to a cash flow crisis.
The insolvency process primarily affects the company's manufacturing base in Germany, putting 310 jobs at risk. However, production at the affected plant will continue uninterrupted for the time being. Employees' salaries are covered for the next three months through Germany's insolvency protection scheme.
The primary objective of the insolvency procedure is to restructure the company. Management is currently engaged in business negotiations with key customers and supply chain partners, and a process to attract strategic investors has also been launched.