Augsburg-based job reductions: UPM, Finnish paper manufacturer, to eliminate 45 positions in August
The German paper industry is currently grappling with a range of challenges, including economic and market pressure, rising costs, supply chain risks, and structural and labour issues. One of the most significant developments in this context is UPM-Kymmene Oyj's potential decision to close its plant in Ettringen, Bavaria, which could result in the loss of 45 jobs in Augsburg and have a significant impact on the local economy.
UPM-Kymmene Oyj, Europe's largest paper conglomerate, is in negotiations with the trade union regarding the potential plant closure. The trade union has threatened industrial action if their demands for better severance packages and part-time retirement arrangements are not met by UPM-Kymmene Oyj.
International trade uncertainties, such as US tariffs, have caused dampened growth and export decline in Germany, weakening demand and putting pressure on industries including paper manufacturing. The pulp and paper sector also faces rising energy, labour, and transportation costs amidst falling product prices, which squeeze margins.
Complex supply chain risks, like chemical exposure, labour violations, and environmental compliance challenges, pose operational difficulties and regulatory risks to pulp and paper companies. New regulations require greater transparency, which can be a competitive advantage but also a compliance challenge. Germany is also dealing with skilled labour shortages and regulatory burdens that affect innovation and productivity in manufacturing sectors, including paper.
The city of Augsburg stands ready to support the affected employees in case of plant closure, and the German government is closely monitoring the situation and is ready to provide support if necessary. The negotiations between UPM-Kymmene Oyj and the trade union are ongoing, with the company yet to make a final decision on the plant closure in Ettringen, Bavaria.
The trade union's response to plant closures typically involves efforts to protect workers' rights, negotiate severance and retraining programs, and push for government intervention or support measures. In this case, the union finds the offered severance packages and part-time retirement arrangements by UPM-Kymmene Oyj insufficient. If the plant does close, it would be another example of the broader industry stress faced by the German paper industry.
UPM-Kymmene Oyj's potential plant closure in Ettringen, Bavaria, could have significant financial implications for the city of Augsburg and the surrounding business community. The trade union's negotiations with UPM-Kymmene Oyj revolve around better severance packages and part-time retirement arrangements, signifying a concern within the finance sector about the impact of the closure on the industry's workforce.
