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Erstaunliche Autos

Refinancing project
R.Gringhuis & M.Pit Tompkins and Kosters

Content overview

Current situation analysis

Major issues

Recommendation package


Difficulties Conclusion

Current situation at EA

Medium sized car manufacturer

Base of operations: Frankfurt

Workweek: four days Salary rates average: 140% of competitors salary rates

Analysis of major issues

Work days + salaries Fierce competition by Chinese

Recommendation package

Boost profits by 4bn, period of 3 years Save 7bn over 3 years


2 bn 5 bn

Run campaign to improve sales Cost cutting measures

Improve overall plant productivity


5 days workweek Opportunities for 6th day, 150% wage

Negotiate a decrease suppliers costs by 10%

Three year cost-cutting programme

Savings in improved sales; 2bn Reducing suppliers' costs by 10%; 2bn

Others; 2bn

Savings f rom labour costs; 1bn

Recommendation package

Manufacturing centre productivity In *1000 cars per year


250 EA Germany EA Belgium 150 Chinese car manufacturer Indian car manufacturer




0 Productivity

Recommendation package

Establish new manufacturing plant

Decrease costs  Increase productivity  Increase competitiveness

Outsource production of non-essential components

Cut costs for parts, savings: 20-30%

Recommendation package

Reduce workforce in Belgian and German plants by 30%

Redundancy packages for senior worker >55
Voluntary redundancies
Average pay rates per hour for assembly line workers
50 45 40 35 30 25 20 15 10 5 0 Germany China Usa

Salary in $ per hour



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