Recaro Aircraft Seating reaches deal with employees to secure jobs and prevent layoffs

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Use thisAircraft seating manufacturer Recaro Aircraft Seating said a majority of its employees have voted to approve the company’s concessions plan to help keep the company in business and prevent job losses. A total of 95 percent of IG-Metall (IGM) members voted “yes” for the concessions made by employees, which prevents dismissals for operational reasons. With 80 percent of the votes accounted for, the result secures the employment of the employees at the Schwaebisch Hall, Germany site until 30 June 2023.

The company’s headquarters in Germany. (PHOTO: Recaro)

“The aviation industry has been severely affected by the COVID-19 pandemic. This massive economic crisis also affects Recaro,” the company said in a statement. “Sales in 2020 are expected to be around 300 million euros, 60 percent below the previous year’s level. The company already started preparing for a significant weakening of the market in 2019. International customs disputes have clouded the 2020 outlook, and airline insolvencies and challenges at aircraft manufacturers led to an already-tense market situation last year.

Recaro has been using short-time work in Germany since April to compensate for the decline in production and orders. At the same time, future projects, new product developments, Lean Enterprise and the site expansion “space2grow” with its own flam lab and crash facility are being driven forward in order to emerge from the crisis stronger. “The primary goal is to secure and stabilise the company financially. From the very beginning, the management’s focus was to navigate the crisis together with the workforce. The company is clearly committed to the Schwaebisch Hall location as its corporate headquarters,” Recaro said in its statement.

In addition to short-time work, further concessions became necessary due to the deteriorating market situation. After the summer vacations, intensive negotiations started, in several rounds, between the Works Council, IGM, Südwestmetall and the company management. The workforce repeatedly gave clear signals of its willingness to make concessions under collective agreements. By that, they sent a clear signal of the cohesion of the employees and their commitment to the company. The result of the negotiations reflects the importance of a sustainable future for the company, also in terms of corporate social responsibility for the team and the region.

Dr Mark Hiller, CEO of Recaro Aircraft Seating, said “I am very pleased that together we have succeeded in achieving a negotiation result that meets a broad approval. In concrete terms, this means that employees subject to collective pay agreements will waive part of their pay from the end of 2020 until mid-2023. In return, employment security is guaranteed for the permanent workforce until 30 June 2023.”

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