Development of Die Casting Die Casting Foundries Undergo Radical Change
The past few years have been turbulent for foundries. From constantly growing requirements and fluctuating revenues. One of the main drivers of change is the automotive industry, as the most important customer of the casting industry.
On the one hand, future projects of the automotive industry (e.g. electromobility) require enormous investments. Structural and lightweight design play crucial roles in the realization of these projects. Many lightweight components are already produced as prototypes in 3D printers. OEMs such as BMW or Mercedes-Benz are already using this technology to print spare parts. On the other hand, the sales of new vehicles are starting to decline, partly due to the diesel scandal. Compared with the previous year, the share of new diesel-powered vehicles fell by more than 13 %1. Constant uncertainties and political discussions upset consumers and prevent them from buying new vehicles.
In addition, a new emission test standard for new passenger car registrations was initiated at the beginning of September in 2019. The so-called WLTP (World Harmonized Light Vehicle Test Procedure) leads to some changes and challenges, which led to temporal shifts in important projects.
Foundries File for Insolvency
These changes present foundries with major challenges that not all companies have been able to master successfully. In 2018 alone, three German foundries filed for insolvency:
- Alu-Druckguss GmbH
- Auer Guss
- Schweizer Group
Alu-Druckguss GmbH produces high-quality die cast aluminum parts using complex processes. Alu-Druckguss GmbH was forced to file for insolvency six years ago. A poor order situation in 2018 forced Alu-Druckguss GmbH back into insolvency.
Shortly afterwards, the automotive supplier Auer Guss also filed for insolvency. Excessively high one-off costs and investments in new products had a negative impact on earnings and forced the Amberger Foundry to file for insolvency. A three-month restructuring plan is to get Auer Guss going again.2
In December 2018, the Schweizer Group was also hit. The automotive supplier also filed for insolvency under its own administration. Only last year, 100 employees were laid off in the course of the conversion from small die cast parts to larger structural components. One of the reasons for the insolvency application is the lack of funds for new projects.3
Also 2019 does not seem to bring too much luck for some foundries. In 2019 the following German companies had to file for bankruptcy too:
- SHW High Precision Casting Technology GmbH
- Küpper Metallverarbeitung
The Königsbronner SHW High Precision Casting Technology GmbH is currently in its third insolvency proceeding within five years. The foundry was already closed in October 2018. Fortunately, the German foundry was rescued six months later. AVIR Walze Holding GmbH has taken over the business operations of the insolvent SHW HPCT through its holding company Hüttenwerke Königsbronn GmbH. As a result, around 80 jobs will be saved at the Königsbronn location. This article provides you further information to the acquisition of SHW: AVIR Walze Holding Acquires SHW High Precision Casting Technology.
The insolvent automotive supplier Küpper Metallverarbeitung Heiligenhaus has to give up its business. After the last potential investor has also withdrawn his investment, it is no longer possible to maintain the company and continue business operations in the long term. None of the interested parties was prepared to commit themselves to the Küpper Heiligenhaus. Find out more about the course of the insolvency here: Küpper Metallverarbeitung Must Shut Down its Plant.
Iron Foundries Also Affected
GF Casting Solutions is also affected by the changes. The division of GF is one of the world’s leading solution providers for lightweight components in passenger cars, trucks, the aviation and energy segments which reduce CO2 emissions. GF Casting Solutions has withdrawn from the automotive iron casting business in Europe and divested its iron foundry in Herzogenburg (Austria) to MRB FerCon GmbH. The light metal foundry at the same location is not affected by the divestment.
The company Gusswerke Saarbrücken has already filed for insolvency in September 2019. As a result, 600 out of 1,050 jobs were cut at the end of November 2019 and finally, in December, even the last employees received their notice. Now the foundry will finally cease operations at the end of June 2020. The foundry mainly produced and developed cylinder crankcases, cast iron cylinder heads for industrial engines and cast crankshafts.