Editor’s ChoiceUp to 2,700 jobs worldwide are potentially affected by reductions or relocations
The expected release from Miele has just arrived. Accordingly, the Miele Group also felt the effects of the global collapse in demand for household appliances and the drastic price increases on the cost side. In order to counteract this in the long term, a comprehensive program was launched “to further improve structures, processes and cost positions,” as it is written. One consequence is the “substantial reduction in personnel costs”, which means that up to 2,700 jobs worldwide could be lost or affected by relocation. In addition, almost all household washing machines are to be assembled in Ksawerów, Poland, in stages by 2027.
In the last few days there have been a lot of rumors about serious changes at Miele (elektro.at reported), now the German Miele management announced the following: “After three years of strong growth in a row, the household appliance industry as a whole is recording a worldwide decline in business in 2023. In addition to the end of the corona-related boom, the economic consequences of the war in Ukraine had a particularly significant impact here. And unlike previous market downturns, this is particularly noticeable in the premium segment. In this environment the provisional Miele Group sales fell by around 9 percent; both number of units sold is the The gap to the previous year is about twice as high. There are no signs of an imminent market recovery in sight. At the same time, high inflation is resulting in significantly higher costs on the procurement side, for example for materials and energy, as well as in tariff fees.”
Sustainable change
“What we are currently experiencing is not a temporary dip in the economy, but rather a lasting change in the framework conditions relevant to us that we have to adapt to,” said the management of the Miele Group in an internal information to employees today. We will therefore “act quickly and decisively” in order to emerge stronger from this challenging situation. The framework for this is provided by one Group-wide cost and efficiency initiative with the label “Miele Performance Program“, aimed at the structures, processes and cost positions in all areas. To “sustainable securing of economic viability“should be until 2026 a additional financial scope for action of approximately 500 million euros was created more than two thirds of which are through Improvements on the sales side as well as Reduction in material and material costs.
“Necessary reaction to changing market conditions”
And also Significant savings must be made in personnel costs This can be achieved “after a significant amount of additional competencies and capacities have been built up in the high-growth years since 2019,” as Miele says. “Due to the changed market situation, adjustments are now inevitable. Of these, according to current planning Up to 2,000 jobs potentially affected worldwideand this mainly in the so-called “indirect areas”, i.e. “not on the production machines and assembly lines”.
Relocation to Poland inevitable
In addition, considerable efforts are necessary to… Laundry care at Miele, which is located in a “fierce and strongly price-driven competitionto put it back on an economically viable basis. Miele says: “The Laundry business unit is working on one for this even more customer-oriented product strategyone more effective marketing and the Reducing complexity. In addition, it is based on the current planning status However, for cost reasons it was unavoidable to relocate further parts of Gütersloh washing machine production and production-related areas to the Miele factory in Ksawerów, Poland.“
Almost all household washing machines will be assembled in Ksawerów
Subject to negotiations with the employee representatives, it is now planned that “Almost all household washing machines will be assembled in Ksawerów in stages by 2027“. Overall would As a result, around 700 jobs will be gradually eliminated at the Gütersloh plant. The remaining parts of the equipment production there, such as the pressing plant, foundry or processing of the cast parts, would not be affected, but would remain in Gütersloh until further notice. This also applies to the assembly of washer-dryers and small commercial machines.
2,700 of the currently around 23,000 positions affected – job cuts as socially acceptable as possible
If you add up the measures described, they would be potential 2,700 of the currently around 23,000 jobs affected. “These are serious steps and we are very aware that this will hit many colleagues hard,” the management continues. But this is the only way to lead Miele into a successful future – “as a strong and independent family business with a consistent premium focus and the necessary profitability in all areas”.
Which areas can be affected by personnel cuts and to what extent? is not yet clear, as the details of this need to be worked out further in the coming months and negotiated with the social partners. “The potential job cuts of the amount mentioned do not mean that anywhere near as many layoffs are to be expected,” said the management and: “Miele would not be Miele if the upcoming restructuring was not as socially acceptable as possible and in close coordination with would be designed by the employee representatives.” As announced, a constructive dialogue with IG Metall is also being relied upon.
Strategic investments for innovation and growth
In the year of the 125th anniversary, another declared goal is to set the tone for growth again. “To achieve this, Miele can rely on its strong brand, premium and quality standards that are unique in the industry, inspiring products and committed and creative teams in 50 countries. “We are also a family business that doesn’t think in quarters, but in generations,” emphasizes the management in its outlook for the coming years. Accordingly, Miele continues to consistently invest in its strategically important projects. Current examples include the development of new product generations, the construction of an additional plant in the USA, the complete takeover of the grill specialist Otto Wilde – and the planned joint venture with Metall Zug AG to strengthen medical technology at Miele.
Statement from Austria CEO Sandra Kolleth
Miele Austria CEO Sandra Kolleth says to elektro.at: “According to the Miele Performance Program, 2,000 positions are available worldwide, largely in so-called indirect areas (no production/assembly activities). Detailed statements on the affected areas can only be made in the coming months.
As announced, no production locations are available. Supplier plants such as Bürmoos will continue to supply parts for other production sites in the Miele network. Miele continues to provide its customers in almost 50 national companies with premium products and services of the usual excellent quality.”
Media in Germany report criticism from the union
According to the German Tagesschau, the IG Metall union Criticism of Miele’s plans. “The market situation for Miele is currently tense. After the record years from 2020 to 2022, there is no reason to resort to such measures when the first headwind hits,” the union is quoted as saying.
The North Rhine-Westphalia district manager Knut Giesler is also quoted: “The company is moving away from its brand promise and is now apparently focusing on cheaper instead of better.”
And the Tagesschau continues: “During the Corona pandemic, the company benefited from strong demand for household appliances. In 2022, sales rose by 12.2 percent to 5.43 billion euros, more than ever in the company’s history. Figures for 2023 are not yet available.”