Tognum subsidiary Rotorion and IFA examine collaboration

• Strategic collaboration in drive shaft business planned in preparation for Tognum´s medium-term withdrawal
• Product portfolios and technologies complement each other
• Bundling operations at one location being considered

Friedrichshafen, 26 February 2009. The propulsion and power solutions specialist Tognum AG and IFA Group, Haldensleben, have signed a letter of intent to examine the possibilities of a collaboration in the field of drive shafts. If this mutual examination should prove positive, IFA’s drive shaft business operations and the Tognum drive shaft unit Rotorion are to be combined.

Due to the effects of the economic and financial crisis, the market environment is becoming increasingly difficult for suppliers of components to the automotive industry. In view of this situation, the collaboration would result in an improved market and cost position.

Should the collaboration take place, capacity is to be successively increased at one of IFA’s existing locations within the next five years. The Rotorion employees at the Friedrichshafen location would then be given the option of moving to the new location or of remaining within the Tognum Group in another capacity – such as in the assembly of the new Series 1600 engines.

”As part of our strategic refocus, we stand by our responsibility for the successful continuation of our drive shaft business and towards our workforce. We will therefore do everything we can to find a solution for each individual employee,“ explained Christof von Branconi, Member of the Tognum executive board and responsible for the business unit ”Onsite Energy & Components“. Tognum would continue to provide support for the strategic collaboration between IFA and Rotorion for an estimated five years. With this step, Tognum intends to withdraw completely from the drive shaft business in the medium term.

The IFA Group, which was founded in 1959 in Haldensleben, Saxony-Anhalt, was privatised in 1992 by Heinrich von Nathusius as part of the former GDR combine “Vehicle Construction Industrial Group“. The company, which has around 370 employees and 38 apprentices at the Haldensleben and Gardelegen locations, and generates consolidated revenues (2008) of € 95 million, is a leading supplier of innovative power train components to the automotive industry. The company is specialised in weight and application-optimised drive shafts, constant velocity joints with high operational efficiency and lightweight products using state-of-the-art composite fibre technology.

At its Friedrichshafen and Charleston/USA locations, Rotorion, one of the leading manufactures of drive shafts, currently produces drive shafts for cars and light commercial vehicles, and employs around 700 people.

The mutual examination process is expected to be completed by the middle of the year. The collaboration would then be subject to examination and approval by the German competition authority.


- End -