Tadano has started a strategic restructuring program for its two German subsidiaries, Demag GmbH and Faun GmbH.
Demag and Faun are the core companies of Tadano’s European operations. As a result of the reorganization process, Tadano predicts both companies will further enhance their capacity to serve the needs of customers in Europe and around thw world.
The restructuring also aims to maximize Demag’s and Faun’s value for the Tadano Group, while creating stronger group synergies.
The development of the restructuring plan is expected to take three months.
The plan to restructure follows economic challenges accelerated by the COVID-19 pandemic.
Demag and Faun have decided, in consultation with Tadano and with professional advisors, to file for Protective Shield Proceedings pursuant to the German Insolvency Directive as of early October.
“We intend to permanently optimize production processes at Tadano Demag and Tadano Faun, and offer a far more complete range of lifting equipment solutions in the future,” Tadano said in a news release. “The company remains fully committed to its goal of becoming a global leader in the lifting equipment industry and considers its German operations to be an important pillar in this endeavor.”
Protective Shield Proceedings are a German judicial restructuring procedure, which provides companies in distress with a chance to stabilize their business while staying in control of their operations.
During Protective Shield Proceedings companies draw up a dedicated restructuring plan with some temporary regulations coming into effect to make it easier for companies to reorganize. Protective Shield Proceedings can only be applied to companies that are solvent and for which a successful restructuring is likely – as it is the case with both Demag and Faun.
Both companies have been confronted with shrinking markets and mounting competitive pressure for some time. The resulting economic challenges have escalated considerably in recent months due to the pandemic and cannot be sufficiently mitigated, despite short-time work, as well as other proactive measures taken.
Tadano sees a reorganization of Demag and Faun utilizing Protective Shield Proceedings as an essential step toward better serving the needs of customers and continuing to advance the strategic goals of the Tadano Group.
Following the Tadano Group’s acquisition of Demag Mobile Cranes in 2019, integration initiatives within Tadano’s European and global operations continue to take place. Teams spanning various locations worldwide are working to realize synergies in order to raise global competitiveness in the mid and long term. Production at Demag and at Faun in Germany is ongoing and all existing and new orders are being fulfilled.
