Progress-Werk Oberkirch AG: PWO intends to conclude company collective agreement

- Agreement should strengthen competitiveness of Oberkirch location
- Targeted cost reduction is in the mid-single-digit million range

Oberkirch, September 27, 2019 - At its meeting today, the Management Board of Progress-Werk Oberkirch AG has decided to terminate the company's membership in the Metalworking and Electrical Industry Employer Association with effect from December 31, 2019. Instead, the Company intends to conclude a company collective agreement with the metalworker's union in Germany, IG Metall, in close cooperation with PWO employee representatives.

In light of the continuing weakness in the automotive industry, extensive measures must be taken to adapt to this environment, particularly at the German location with its high level of wages. The decision now taken is intended to strengthen the competitiveness of the Oberkirch location, enable it to continue to operate profitably in the future despite the current industry development.

The Management Board is confident that a company collective agreement will make it possible to tailor the cost structures more precisely to the needs of a medium-sized automotive supplier than is possible within the scope of the industry-wide collective agreement, which is always also tailored to the requirements of the major automotive manufacturers and suppliers. The aim of this step would be to realize savings in the mid-single-digit million range. The industry's development will also continue to require the ongoing implementation of substantial cost-cutting programs, also in the area of material costs. Despite taking these necessary measures, employment security will be maintained until the end of 2020.

Progress-Werk Oberkirch AG
The Management Board

End of ad hoc announcement