BMW's Backing Away From Carbon Fiber Worsens a Supplier's Slump
BMW's Backing Away From Carbon Fiber Worsens a Supplier's Slump
(Bloomberg) -- SGL Carbon SE, the lightweight-materials maker backed by BMW AG, will book a writedown and cut 500 jobs as the slumping auto and aerospace sectors exacerbate woes that predate the pandemic.
Structural changes in some markets combined with Covid-19 mean SGL Carbon’s mid-term prospects are lagging behind expectations, the Wiesbaden, Germany-based company said in a statement Thursday. It will book an impairment of as much as 100 million euros ($118 million) in the fourth quarter.
Torsten Derr has had a tumultuous start to his campaign as chief executive officer. Appointed just as the pandemic hit, the former Lanxess AG and Bayer AG executive is seeking to pare costs at a company that has regularly disappointed investors including BMW and Volkswagen AG. Its shares have plunged 74% since the start of 2018.
When BMW invested in SGL Carbon in 2011, it was keen to secure a supply of carbon fiber-reinforced plastics to trim the weight of models such as the i3 electric hatchback. But while the material is lighter and stronger than steel, it’s also costly and cumbersome to work with and recycle.
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