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Mahle's big-spending boss Heinz K. Junker. Source: DPA
Mahle's big-spending boss Heinz K. Junker.
  • Why it matters

    Why it matters

    To solidify his legacy, company chief Heinz K. Junker might continue his decade-long shopping spree with purchases in the U.S.

  • Facts

    Facts

    • In the 19 years under Mr. Junker, Mahle has grown from 10,000 to 65,000 employees.
    • The supplier is eyeing the thermal division of U.S. rival Delphi, with $1.5 billion in sales.
    • Mahle has bought at least 20 companies with sales worth €5.6 billion over the past 10 years.
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    Audio

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The problems of a business worth billions are hidden in the German countryside.

The automotive parts manufacturer Mahle produces cylinder pistons, valve components and camshafts for gas and diesel engines in the towns of Rottweil, on the edge of the Black Forest, in Gaildorf in Baden-Württemberg and in Wustermark, in the eastern state of Brandenburg. Mahle the fourth largest car parts supplier in Germany with €10 billion, or $11.3 billion, in sales.

But many of its German operations are not covering their costs. About half of the two-dozen German Mahle production sites produced negative operating results in 2014, Handelsblatt has learned. In the worst-case scenario, the factories operating at a deficit could push the overall results for Mahle in Germany into the red.

Long-time Mahle boss Heinz K. Junker let it be known that the “locations in west and central Europe are under significant competitive and cost pressure.” Mahle did not provide details about the operating results on the factory and state levels.

The losses show how difficult it has become for suppliers to still make money producing in Germany. “The car companies pay too little,” said a Mahle insider.

And the automakers continue to put the squeeze on. Volkswagen wants to save €5 billion by 2007 with the VW brand alone. Audi is striving to have €2 billion fewer costs annually. At Daimler, it is supposed to be €3.5 billion annually until 2020. BMW wants to save several hundred millions per year.

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