Sackings force Karmann to file for bankruptcy

Carmageddon has claimed yet another scalp with news filtering through that body specialists Karmann filed for bankruptcy overnight.

Best known for their stunning Volkswagen Karmann Ghia coupé, built from 1955–1974, the German coach-builders currently supply components and body work for convertible models to the likes of Audi, BMW, Mercedes-Benz, MINI and Volkswagen. Contracts with Audi and Mercedes-Benz have either expired, or are coming to an end, and will not be renewed.

While Karmann doesn’t have huge debt hanging over its head, it is suffering the flow on effect from a worldwide drop in automotive sales. Many of its customers are planning to bring work back in-house, leaving Karmann in the lurch.

The company has plans to undertake a massive restructure that would see around 50% of its workforce laid off. This would require redundancy payments for over 2,000 workers, and it is these payments that Karmann cannot afford. By taking the voluntary bankruptcy route it is hoped a buyer can be found and the payments to workers can be saved.

[Source: Bloomberg & theSwitchback]