Osram might cut employee hours. Meanwhile, Schréder reopening European plants

April 8, 2020
Lighting companies continue to cope with the financial impact of coronavirus. Osram will do so with a new CFO.

Osram, the world's second-largest lighting company, has told LEDs Magazine that it may shorten employee hours in the face of the coronavirus pandemic. Meanwhile, another ray of hope emerged for the industry's recovery as Belgium's Schréder Group said it is starting to reopen some European factories.

When Signify, the world's largest lighting company, asked employees for voluntary 20% reductions in work and pay last week, LEDs asked Osram whether it is taking similar measures, and how the health crisis is affecting factory operations.

Munich-based Osram got back to us with a general overview.

“Concerning the employees, Osram aims to find a fair and viable solution for everyone,” a spokesperson said. “Employees are required to reduce their overtime by the end of April. Company holidays and short-time work are also possible options that are being discussed depending on the location.”

Osram factories, like at other companies across all industries, are taking a hit.

“On the plant side, Osram reduced its production in Malaysia and Italy due to COVID restrictions,” the spokesperson said. She did not elaborate on the extent of the reductions. Malaysia is home to Osram's newest LED production facility in Kulim, a €370 million facility opened in November 2017, and to an older plant in Penang.

The spokesperson also did not indicate what actions Osram has taken at its other manufacturing locations including Regensburg and Schwabmünchen in Germany, Wuxi in China, and Exeter, NH.

Eindhoven, Holland-based Signify recently provided a dab of optimism when it disclosed that it started gradually reopening its plants in China the origin of coronavirus at the end of February.

And in another sign of recuperation, Schréder Group disclosed that is now phasing up production at locations in France, Portugal, and Hungary, which it had closed because of the virus. It also made clear that its production is continuing full tilt in Australia. Last month, it had said that its factories are open in China and Ukraine.

“As of today...some activities will progressively restart in our factories in Hungary, Portugal, and France,” the company said in a press release two days ago. “This decision has been taken in line with local government regulations to support the local economies while ensuring the health and safety of all employees. A special task force, set up at the beginning of the COVID-19 outbreak, has implemented strict procedures to guarantee maximum protection for all of our personnel working in all of our factories.”

The company said it continues to suspend its production in Spain “in accordance with decisions taken by the Spanish government.” And for similar reasons in South Africa it has closed production there until Apr. 17.

“Our factories in China, Ukraine, and Australia are fully operational,” Schréder noted.

The full financial impact of coronavirus on lighting companies will emerge in the months to come.

Both Signify and Osram have withdrawn their financial guidance for the year. Signify's executives are also taking a 20% pay reduction while continuing to work full time. The company has also raised prices to offset supply chain difficulties during the pandemic, as has packaged-LED supplier Lumileds.

As Osram copes with the financial setbacks of the world health calamity, it will do so under a new chief financial officer. The company announced this week that it has turned outside the company to name Kathrin Dahnke to the position. Dahnke joins from the management board of Werhahn KG, a German building materials, consumer goods, and financial services conglomerate.

Dahnke starts on Apr. 16, when she will also join Osram's management board. She replaces Ingo Bank, who officially leaves Osram as chief financial officer on May 1 to take the same position with ams, the Austrian sensor company that is acquiring Osram pending regulatory approval.

AMS has said as recently as Mar. 19 that it expects the acquisition to pass regulatory hurdles by the second quarter, which is now underway.

AMS is also hoping that Osram shareholders vote to give ams “domination” status as the new owner, a move that would make it easier for the two companies to find synergies. That vote was expected to take place at a specially called meeting of Osram shareholders at an undetermined date. It's not clear how the world's current slowdown is affecting that plan. LEDs has asked ams but has not yet heard back.

In other recent lighting-related coronavirus developments, the National Association of Electronics Manufacturers (NEMA) in the US has asked that the government deem lighting as a critical industry. And Niles, IL-based LED components and plastics maker A.L.P. Lighting Components has retooled its Charlevoix, MI plant to make protective face shields for healthcare workers.

MARK HALPER is a contributing editor for LEDs Magazine, and an energy, technology, and business journalist ([email protected]).

About the Author

Mark Halper | Contributing Editor, LEDs Magazine, and Business/Energy/Technology Journalist

Mark Halper is a freelance business, technology, and science journalist who covers everything from media moguls to subatomic particles. Halper has written from locations around the world for TIME Magazine, Fortune, Forbes, the New York Times, the Financial Times, the Guardian, CBS, Wired, and many others. A US citizen living in Britain, he cut his journalism teeth cutting and pasting copy for an English-language daily newspaper in Mexico City. Halper has a BA in history from Cornell University.