The German automotive supplier BKD has officially declared bankruptcy, resulting in the immediate layoffs of 500 employees.
The announcement comes as a shock, as the company was in the midst of salary negotiations with its workers when management abruptly pulled the plug.
Unexpected Collapse in the Automotive Industry
BKD (Boryszew Kunststofftechnik Deutschland GmbH), a major producer of plastic components for car interiors, has been struggling financially due to declining demand from its biggest customer, the Volkswagen Group.
The fall in orders from Volkswagen significantly impacted BKD’s financial stability, ultimately leading to the halt of production for injection-molded plastic car parts.
The bankruptcy of BKD marks yet another blow to Germany’s struggling car industry, which is already under severe economic pressure.
BKD’s headquarters and main factory are located in Gardelegen, a town that has been heavily reliant on the company for both direct and indirect employment.
With the factory’s closure, local citizens fear a major economic downturn, as hundreds of jobs hang in the balance.
In response to the crisis, Mayor Mandy Schumacher has called an emergency city council meeting to discuss strategies for minimizing the economic fallout.
Company Under Supervision
Following the bankruptcy declaration, lawyer Michael Steenbuck explained the legal process to Bild Zeitung: “The company’s assets are frozen, and it has been placed under guardianship until a final decision is made regarding insolvency proceedings.”
The supervision period will last for three months, during which BKD’s management must seek a financial rescue plan and negotiate with creditors.
If a viable solution is not found, the factory in Gardelegen may be forced to shut down permanently, leaving hundreds unemployed and worsening Germany’s automotive crisis.
BKD’s bankruptcy is not an isolated case.
Just recently, German auto parts giant Bosch announced that it, too, was feeling the pressure, confirming plans to lay off 12,000 employees as a survival measure.
