The Magna managers have decided: Due to the poor order situation, a further 500 employees will have to be cut, as confirmed to the Kleine Zeitung. Magna management informed the workforce about this on Wednesday. It was already known that Magna had been working on workforce reduction plans for a long time. 450 employees had already been separated. A number of employees were recently terminated below the AMS warning threshold. If you add up all the layoffs, the team will be cut for an entire shift due to the poor order situation.
This is a serious blow for Styria as a business location because it also affects other companies and suppliers. The current order situation leaves Magna no other choice, it was said. The most important priority: Magna must find new orders. Two orders are still running: Jaguar until the end of 2024 and BMW/Toyota until 2026. Internal sources say: The chances of new orders are not bad, despite the tense economic situation in the automotive industry. But immediate implementation in production is not realistic.
Reactions to job cuts
So far, less than 10,000 vehicles have been built
Magna decided to cut staff before today’s Fisker shareholders meeting. The US-Danish electric car manufacturer Fisker came to Magna in Graz with great ambitions for production and had predicted 40,000 units of its Ocean model per year. So far, less than 10,000 vehicles have been built.
Magna had recently increased the pressure on Fisker for a short time. They wanted clarity about what would happen next. However, further consequences were avoided in order not to further accelerate the downward spiral. Recently, the only issue was an even longer suspension of production, according to well-informed circles. The production break has already been extended until the end of June.
Urgently needed investors
Magna should receive clarity shortly, it is the day of truth for Fisker: The electric car manufacturer, which has production at Magna in Graz, wants to save its future at a shareholders meeting. Fisker recently confirmed to the Kleine Zeitung that it was trying to find “strategic partnerships” with Deutsche Bank and takeover specialist PJT.
There has been a big question mark behind Fisker for months, and there is increasing speculation in the media about an impending end. The rumored debt burden of around a billion dollars and dwindling cash reserves ($120 million) are weighing heavily on Fisker. Fisker desperately needs investors to continue.
The New York Stock Exchange had even withdrawn the stock from trading; it had lost 99 percent of its value. In the end, Fisker couldn’t or didn’t even want to service the interest due on convertible bonds. Rumored deals with Chinese or Japanese car manufacturers have reportedly recently collapsed.