Nuremberg, Germany – Automotive cable and wiring specialist Leoni AG expects “considerable burdens” on its sales, earnings and liquidity as a result of the outbreak of Covid-19.
The company has closed production facilities in Europe, North Africa and the Americas due to the global pandemic and is introducing a “short-time work” scheme in Germany and other European locations, Leoni said in a 23 March update.
Through these measures, Leoni expects to "significantly reduce" material and personnel costs, amid the increasingly lower demand by major car makers.
Leoni expects the shutdowns to be upheld as long as car manufacturing is restricted in Europe. The company said it anticipated the automotive production halt to last up to four weeks and possibly longer.
In China, however, the company’s wiring systems facilities are returning to normal.
“All plants were able to stabilise production at almost the previous level [in China],” the company added.
In addition, Leoni is planning to apply for government financial aid to increase its financial flexibility.
"These funds will increase the financial flexibility of the company and are to be used at group level to ensure the continuation of business operations," it said.