German plant closures by Japanese auto manufacturer impact hundreds of positions
Japanese automotive supplier Musashi, known for producing parts for companies like Volkswagen, has announced plans to close two of its plants in Germany and significantly reduce headcount at a third, following years of financial struggles in Europe.
The affected plants are located in Hannoversch Münden and Leinefelde, with hundreds of jobs potentially at risk at the Lüchow plant. The management will negotiate with works councils and trade union representatives regarding social measures and the balancing of interests before implementing any closures and redundancies.
Despite a brief period of profitability, Musashi's European plants returned to losses by the second half of 2024, incurring a loss of approximately 100 million euros after taxes. This financial setback, along with the pressure from Asian competitors and the struggling European vehicle market, accounted for around 20% of Musashi's total revenue.
The company's losses in Europe are primarily due to the pressure exerted by Asian competitors on prices, which has made it difficult for Musashi, a manufacturer of parts that are less relevant in electric vehicles, such as clutches. Since 2018, sales at Musashi have decreased by 40 percent.
In an attempt to turn things around, Musashi implemented a restructuring program in 2022. However, this program was not successful, and the company is now facing the difficult decision to close its sites in Göttingen, Hann. Münden, and Leinefelde.
The timeline for these closures and redundancies has not been disclosed yet. The company's struggles in Germany are a significant setback for Musashi, which employs 2,000 of its global 16,000 employees in nine plants, six of which are in Germany.
The total turnover of Musashi is two billion euros, with half a billion euros coming from Europe. The company's investment in advanced manufacturing technology, such as the highly efficient 5,000-ton eccentric forging press in Bockenau, Germany in 2019, has not been enough to overcome the operational challenges the company has faced.
This news comes as a blow to the German automotive industry, which has been grappling with its own challenges, including the transition to electric vehicles and the pressure from Chinese competitors. The closure of Musashi's plants in Germany is a reminder of the ongoing difficulties faced by manufacturers in the European vehicle market.
[1] WirtschaftsWoche, June 2025. [2] Reuters, June 2025. [3] Musashi Europe press release, 2019.
The decision to close two plants in Germany by Musashi, a Japanese automotive supplier, might significantly impact the business sector and finance, as hundreds of jobs could be at risk at the affected plants in Hannoversch Münden and Leinefelde, and Lüchow could also be affected. The financial struggles of Musashi's European plants, including the loss of approximately 100 million euros after taxes in 2024, have been exacerbated by pressure from Asian competitors, the European vehicle market, and the transition to electric vehicles, causing around 20% of Musashi's total revenue.
