Haldex will concentrate production of EBS and air suspension products in Hungary, shutting down the factory in Heidelberg, Germany.
"Haldex's European region has not managed to increase profitability to a level that meets the expectations," the supplier said in a statement.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
"The expected economic downturn and the cost level in Germany has resulted in the decision to move the production. Through co-locating the production in Heidelberg with the production in Szentlorincskáta in Hungary, economies of scale can be reached whereas the production costs decrease."
One hundred people are affected by the shutdown. Of those, 17 employees will remain at Haldex in regional and global positions located in Germany. Notices to workers will be distributed throughout 2020.
Negotiations with the trade union association have begun and are expected to be completed in 2019.
Haldex said the costs of the move "are difficult to predict as the levels of compensation are part of the negotiations that have just been initiated".
It will announce the estimated costs later and book them as non-recurring items, most probably in the fourth quarter of 2019.
The move is expected to be completed during the first half of 2020.
Earlier in October, Haldex announced a similar operation, moving production from North America to Mexico.
It aims to achieve an operating margin of 10% by 2022, excluding investments in new technology.
With these changes in production structure, the savings are estimated at SEK75m annually, after they have been fully implemented.
