FRANKFURT, March 23 (Reuters) - German auto supplier Leoni said it would close plants, reduce the working hours of its staff and apply for state aid as a way to counter the fallout from the coronavirus.
Leoni’s business was struggling before the coronavirus crisis hit. But steps by major carmakers to idle plants in Europe has led to a further decline in business for the Nuremberg, Germany-based auto supplier.
“Leoni AG expects considerable burdens on sales, earnings and liquidity. The level of this impact is not foreseeable at this stage,” Leoni said.
Leoni plans to close plants in Europe, North Africa and the Americas and to introduce short-time work in Germany, responding to plant closures by carmakers, which are expected to last at least four weeks.
“Leoni will also take up the offer of the German government and plans to apply for financial aid. 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,” Leoni said.
The German Economy Ministry said on Monday that companies could immediately apply for the KfW state development bank’s programme to support the economy in 2020 as the world battles a coronavirus outbreak. It said the funds in the programme were unlimited and available to small, medium-sized and large companies. (Reporting by Edward Taylor Editing by Michelle Martin)