Economic thriller in Lower Bavaria: processing plant A-Kaiser is threatened with next insolvency

The background is the problems with Volkswagen, but above all the investor Gramax is being criticised

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As Sabine Kain of the Passauer Neue Presse (PNP) and the chairman of the works council of A-Kaiser report concurly, a dramatic economic thriller is playing out over the preservation of the more than 400 jobs in Aicha vorm Wald and Straßkirchen, which the IG Metall trade union believes can be solved if the company frees itself from its owner Gramax.

The plan seems risky, but the union considers an amicable solution unrealistic.

If the company is to survive, a new investor must be found. IG Metall believes that insolvency proceedings are the most effective way to get rid of the current owners, who have not only fallen out with main customer VW, but have also come to Aicha with a past peppered with bankruptcies.

A-Kaiser GmbH currently still employs about 430 people at its sites in Aicha vorm Wald and Salzweg-Straßkirchen. Some employees have left the company, also from the management level. The majority of the workforce is on short-time work. In the halls where otherwise clutch and gearbox housings, gearshift wheels, brake discs and drums as well as other parts for the automotive industry are machined, it has become quiet.

Dispute with Volkswagen

It is not only the pandemic that is causing problems for A-Kaiser. According to PNP information, the management and shareholders of the supplier have fallen out with Volkswagen. Price negotiations with the industry giant escalated and VW cancelled the contracts at the end of May. This meant the loss of a large part of the production in Aicha and Straßkirchen. A-Kaiser is supposed to generate 95 percent of its turnover with VW. The managing director has challenged the termination of the acceptance and supply contracts without notice in interim injunction proceedings against Volkswagen AG. But it is said that VW is no longer willing to cooperate with the current shareholders of its supplier.

It would not be the first insolvency for the foundry. As a result of the economic crisis in 2009, Kaiser GmbH, which was still owner-managed at the time, ran into problems; in 2014 it was insolvent. The Amtek Group from India took over the company, which since then has had an A in front of its name. When the highly indebted Amtek was broken up in 2017, A-Kaiser went to a trust, which found a buyer for the company, which was burdened with high liabilities, in October 2018: Gramax Invest AG in Switzerland. Behind it are the two Germans Alexander Schwarz and Achim Pfeffer.

Several companies already damaged by investor

The workforce and the trade union placed their hopes in the new owner, but previous takeovers of Gramax show that the investor is not necessarily a rehabilitator. Several companies that Gramax bought no longer existed one or two years later. Since 2018, the public prosecutor's office in Kaiserslautern has been investigating the insolvency case of the Palatine furniture manufacturer CS Schmal, where Pfeffer had personally taken over the management. The insolvency administrator assumes that CS Schmal was deliberately harmed by the investor. The car parts supplier Küpper from near Wuppertal, which also once belonged to Amtek and was taken over by Gramax in May 2019, was bankrupt in April 2020. There, price negotiations escalated until customers bailed out - as is now the case with A-Kaiser.

In order to save the company and the jobs, the trade unionist is certain: "The shareholders have to go." At the moment he sees only one way to do this: insolvency. This would open up the chance of finding a new owner. IG Metall Passau has enlisted support for the hoped-for turnaround: Frank Günther from One Square Advisors in Munich. The company specialises in restructuring companies in crisis. Among its references are Tui, Halberg Guss and Eterna. Günther says openly in response to a PNP enquiry: "We are interested in working on a solution for A-Kaiser." But at the moment there are still many unanswered questions.

One problem is the complex company structure that Gramax has woven around A-Kaiser. For example, the car parts supplier does not belong directly to the Swiss parent company, but to the specially created G-Holding AK Share GmbH in Munich. After the takeover, the machinery was sold to G-AK Loan GmbH in Munich and leased back. Achim Pfeffer is managing director of both companies. Whoever wants to take over A-Kaiser must therefore ensure that the influence of Gramax does not continue.

IG Metall lobbies for new orders from VW

In August 2020, A-Kaiser bought back its machines in order to save rental costs and improve its current liquidity. This was probably to create the conditions for the disbursement of 12.5 million euros from the federal government's Economic Stabilisation Fund (WSF). According to the annual report, the sum was applied for partly as a silent partnership and partly as a subordinated loan and was approved in January. Before a change of ownership, there would be a need for clarification with the WSF.

In the event of insolvency, it remains to be seen who will win the bid for A-Kaiser. It is to be expected that the customers, above all Volkswagen, will play a key role - also in the question of whether the company will continue at all. According to trade unionist Starkl, IG Metall is lobbying the VW supervisory board to ensure that the Wolfsburg company will once again award contracts to A-Kaiser. The prerequisite for this is that the supplier must get rid of its owners.

Source: Passauer Neue Presse (PNP), Sabine Kain and Werner Müller, Chairman of the Works Council A-Kaiser