Deutz to close site

Engine manufacturer Deutz is to leave its exchange engine production site in Übersee on Lake Chiemsee in southern Germany, having said three months ago that it was investigating a possible relocation of the plant to its Ulm site.

It said that a thorough and comprehensive process of analysis by the company’s board of management had now led to the decision to close the Übersee plant and to integrate exchange engine production at Ulm.

Deutz said its Xchange engines were what engine manufacturers all over the world had always offered as “general overhaul” or “replacement engine”.

Concentrating production on one site, the company said, would enable productivity to be increased and fixed costs to be reduced. Synergies would largely be created from the use of the Ulm plant's infrastructure and from shared overheads, it said.

Chairman Dr Helmut Leube said, "The decision to integrate our plant in Übersee into the Ulm plant was not easy for us. But by concentrating exchange engines in Ulm, we are laying the foundations for our growth strategy in the Xchange and service business. So from a strategic perspective, this is the right decision for the company.”

The closure of the site will affect 157 employees.

Dr Margarete Haase, the Deutz board member responsible for finance, human resources and investor relations, said, "Our aim is to encourage as many people as possible to work in Ulm. To achieve this, we and the works council will be devising working time models tailored to the situation, and we will be offering financial compensation for costs such as second homes and travelling expenses."

The relocation of the exchange engine plant will be carried out in stages until the end of 2015.