Karmann in trouble

An interesting story that's been bubbling away over the last week in the German press but hasn't really featured much in English language publications. Karmann, the German coach-builder, has run into a very sticky patch indeed. The company says it needs to cut about 1800 of its 7000 jobs, including about 870 of the 4000 positions at its main Osnabrück site in North-Rhine Westphalia.

So - what's the problem? Well, let's go back to that description coach-builder; that's how Karmann is normally classified but in truth it is something rather more impressive. Like Magna-Steyr in Austria and Valmet Automotive in Finland it is really a contract manufacturer capable of manufacturing complete cars from the ground up - it's just that it does this for other car companies rather than selling those cars under its own name.

Over the years, Karmann has worked with a wide range of automotive groups but its relationship with Volkswagen has always been central to its business. Convertible Beetles were churned out in Osnabrück for decades, and of course, there were the two families of Karmann Ghia coupes in the sixties (not many people realise that there were two distinct model families, but that is an interesting story for another time). More recently, Corrados and Golf convertibles have been built in large numbers too.

Anyway, Karmann says its existing contracts for delivering fully built-up cars will come to an end in late 2008. One problem, according to the German media, is that Volkswagen isn't putting business Karmann's way, a decision that is being put down to Porsche's growing influence at VW; apparently there is bad blood between Karmnn and Porsche that dates back to a legal dispute in the nineties in which Karmann claimed that Porsche was copying its ideas. A further report suggests VW is actually interested in buying Karmann.

I'm not sure where all this will end but the automotive world would be a poorer place without the cars from Osnabrück, so let's hope some better news turns up soon.