Management of Neoman Bus Group, a division of MAN AG, has started discussions with employee representatives about restructuring the division.

The company said it was seeking improved productivity in complete bus assembly, improvements in chassis manufacturing in Salzgitter, as well as making better use of synergies with the truck business.

Neoman has been struggling to head off competition from producers in low cost countries and the company considers concentrating production and exploiting synergies with the truck division as central to improving the competitiveness of the company.

"The bus business is of long-term strategic significance to MAN Commercial Vehicles and must therefore be put on a firm footing for the future by taking appropriate measures," said the company.

Neoman Bus Group is part of the bus division of MAN Commercial Vehicles and develops, produces and markets buses under the MAN and Neoplan brand names. Turnover last year was EUR1.5bn on production of 7,338 buses and bus chassis. At the end of 2006 Neoman employed 8,900 people at eight production sites in Germany, Poland and Turkey.

A union representative from IG Metall told Automobilwoche that this was the start of a tough fight to preserve the bus plant at Salzgitter. The plant is the most expensive of the eight Neoman plants.

MAN CEO Hakan Samuelsson told the paper that the bus division could be merged into the truck division, or into another MAN division. He said more details would emerge in the coming weeks.