ANNUAL REPORT 2020
SYSTEM PARTS SEGMENT
The pandemic had an unprecedented impact on the course of business, particularly in the first half of the year. Thanks to considerable collective efforts on the part of all employees and a mid-year market recovery, performance in the second half of the year was – given the circumstances – much stronger. In the end, System Parts succeeded in outperforming the global automotive sector. This puts us in a promising position to achieve sustained profitable growth.
Parts production was severely impacted by the outbreak of the coronavirus and its aftermath in the first half of 2020. The markets in Asia, and subsequently in Europe and the USA, came to a partial standstill during the first half of the year. Customer releases were temporarily suspended and we were no longer able to deliver our products. Feintool plants worldwide responded to this situation with extremely swift and efficient measures. In Europe, short-time work schedules were a successful method to quickly adjust to temporary overcapacities. In the United States, almost all of our employees had to be furloughed in order to respond to the production stoppages. In China, the plants were temporarily closed due to official orders, thereby prohibiting employees from working. All of Feintool’s plants introduced strict cost management measures, and repairs were only carried out in exceptional cases. Capital expenditures were halted or postponed wherever possible. To secure liquidity, the company negotiated an extension of its credit lines with its principal banks.
After the summer, demand for our products began to pick up significantly. Production in China had already restabilized by the end of the second quarter. As a result of the existing new product launches, production output fortunately rose above the market level, as planned. In the United States, the company experienced a surprising V-shaped recovery in demand. This meant that steel resources, as well as the availability of employees, could no longer meet demand. In the United States, we were able to return to precrisis levels extremely quickly. Although Europe recovered significantly in the second half of the year, it has not yet returned to precrisis levels. Responding to the rapid rebound in demand was a major challenge for all the plants. Ensuring the availability of equipment and employees as well as process stability was essential in order to meet customer supply requirements.
Despite the restrictions imposed by the measures to combat the spread of the coronavirus, all of our plants continued to successfully work on improving their processes. The company succeeded in stabilizing new manufacturing processes in Asia. The necessary capacities at the Tianjin plant have been installed and are currently being used for series production. In Europe, the plants implemented the improvement projects that had already been initiated. As a result, the company was able to significantly improve its customer delivery performance. Additional costs were eliminated by digitizing quality management. In addition, the plants achieved a lasting reduction in inventories. The modernization of a press plant in Germany is proceeding according to plan. It will begin series production in 2021. The level of automation in the United States was increased in 2020 to stabilize the production process and improve efficiency. Thanks to the successful implementation of these measures, Feintool System Parts is emerging from the crisis stronger than before. The first positive effects could already be seen in the second half of 2020.
The automotive market will continue to become more globalized. Major customers (OEM, Tier 1) continue to expand their activities in the global sales markets. Feintool has an established presence in all of the most important regions. Sales activities, product and process development, and series production are located close to these customers. This strategy was successfully implemented in 2020 with Japan-based OEMs and Tier 1 partners following intensive sales activities. Our long-standing presence and local corporate culture have paid off. Feintool secured new orders from Japanese customers in Japan, China, Europe, and the United States.
Feintool reaffirmed the importance of electric mobility within the scope of its strategy review. The company will continue to focus on expanding business with electro lamination (rotor/stator) and bipolar plate (fuel cell) technologies. Feintool’s fineblanking and forming technologies are becoming increasingly important for electric cars. Hybrid concepts and the spread of automated drive systems will continue to play a major role for existing products. The bottom line is that we want to make the future of mobility possible with our high-performance sheet-metal technology.