ThyssenKrupp will realign automotive system engineering activities from 1 October by splitting the current system engineering business unit into two independent units. One will eventually be sold and there will be job losses.

The aim is to create two independent companies with different product ranges. One will be an engineering company specializing in body assembly lines which will continue to be managed as part of the automotive supply and service segment (Automotive Technology).

The other will combine the current powertrain and battery assembly activities and will be part of the portfolio segment (Multi Tracks).

Eventually, the latter will be divested either through partnerships or with new owners.

The split was part of a portfolio strategy presented last May.

Ingo Steinkrueger, CEO of Thyssenkrupp System Engineering, said: "We have prepared the realignment of the company meticulously over the past few months. In the coming weeks and months we will now implement these preparations step by step. We will ultimately create two new specialised companies that can develop profitably in their respective market segments."

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The body activities with sites in Baden-Wuerttemberg, Saarland and Hessen will be repositioned as an automotive bodymaker with integrated value chain capabilities. This company will specialise in body assembly products and the production of lightweight body parts for automotive customers.

The powertrain and battery unit will continue its transformation towards e-mobility so that in the future it can establish itself as a general system engineering contractor for alternative powertrains and storage technologies. This will affect company sites in Bremen, Lower Saxony and Saxony.

The separation and realignment of the two business units will involve further restructuring at the individual sites. In this connection around 800 jobs will be reduced across both units in the current fiscal year. Around 500 of these jobs are at sites in Germany.

The reason for restructuring is a slump in order intake and sales drastically exacerbated by the coronavirus crisis. With the split, central structures at the headquarters will also be eliminated.

"The market situation in automotive system engineering remains extremely challenging. We don't expect output figures in the auto industry to return to pre-crisis levels for at least two to three years. We therefore need to use the split and realignment of the company to bring structures and administrative costs in both parts of the business into line with market levels. We will not be losing any technology segments through this but will adapt our site concept and consolidate capabilities," added Steinkrueger.

The system engineering business unit currently operates nine development and production sites in Germany. In Bremen and Langenhagen (Lower Saxony) the company develops and manufactures assembly and test facilities for IC engines, electric motors and fuel cells. At its Heilbronn (Baden-Wuerttemberg), Lockweiler (Saarland) and Burghaun (Hessen) sites, body assembly lines are developed and produced.

The company also operates two battery assembly line plants in Hohenstein-Ernstthal and Chemnitz (Saxony). The Muehlacker and Weinsberg (Baden-Württemberg) sites develop and produce lightweight vehicle products.

Altogether around 3,200 people are currently employed in automotive system engineering at Thyssenkrupp in Germany.