Porsche AG Announces Significant Job Cuts at its Subsidiary, Cellforce
In a significant move, Porsche AG has announced the decision to abandon the independent expansion of its subsidiary, Cellforce, based in Kirchentellinsfurt. This decision comes after high investments totaling over a billion euros from Volkswagen and special depreciations of around 295 million euros, but without the materialization of series production.
Established with the goal to develop high-performance lithium-ion cells for motorsports and small series, the factory was supported by BASF and Group14, with the intention to supply up to 1,000 vehicles per year. However, the consequences of the shutdown are yet to be determined for both Porsche and the sports car industry.
The factory was funded with around 60 million euros in state funds, and it seems that there could be clawbacks of public funding and additional social or restructuring costs that exceed the previously calculated burdens. Special expenses of 1.3 billion euros have already been factored into Porsche's forecast, limiting the immediate impact.
Porsche is planning to cut around 200 jobs at Cellforce, a move that has been communicated at the end of April. The local employment agency in Reutlingen has been informed about the mass layoffs. It remains to be seen how Porsche will shape the exit from Cellforce and whether buyers for the technology or facilities can be found.
Reports mention interest from BMW emissaries and some defense companies, but no finalized buyer has been disclosed. Despite the uncertainty, Porsche's move could potentially reduce capital requirements, execution risks, and stabilize margins and free cash flow in the medium term.
It's important to note that the management and majority shareholder of the publisher Boerse-Medien AG, Mr. Bernd Foertsch, holds positions in financial instruments related to Porsche AG that could benefit from the potential price development resulting from the publication.
The exit from Cellforce could also pose risks for Porsche, such as losing potential technology in the premium segment and becoming more dependent on suppliers. The sports car industry is closely watching these developments, as the implications could be far-reaching.
Porsche has not yet commented on the matter regarding the layoffs at Cellforce. The small research unit might remain at Cellforce, but this is not yet confirmed.
In response to the news about Cellforce, Porsche AG's stock is down around 1.2 percent. However, there is no urgent need to buy Porsche AG stock in the current phase. The future of Cellforce and its impact on the sports car industry are still unfolding, and updates are expected in the coming months.
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