Germany’s Deutz AG issued an announcement that it, “welcomes and supports the change of ownership for the business operations of Neue Halberg Guss GmbH (NHG) that was agreed today.” Part of the change of ownership apparently involves a financial commitment from the Cologne-based engine manufacturer. NHG is a major supplier of cast parts to Deutz.
“A viable solution has thereby been found both for NHG’s employees and for customers who rely on its cast parts. Under this arrangement, the new owners, whom Deutz Group is actively supporting with partial financing, will acquire the relevant production facilities and land at the Saarbrücken and Leipzig sites.”
The announcement added that the new ownership situation will ensure that Deutz is supplied with the engine blocks, crankcases and cylinder heads it needs to manufacture its engines. “After many months of intensive negotiations and associated uncertainty, a long-term solution has finally been found. This gives us planning security and will ensure reliable deliveries to our customers,” says Chairman of the Deutz board of management Dr. Frank Hiller.
In October, a German regional court ruled that NHG must immediately resume supplying cast parts to Deutz AG as contractually agreed. Deutz said it felt it had no option but to apply for an interim injunction when NHG, its partner of many years, demanded significant price increases, one-off payments amounting to millions of euros and firm purchase commitments in return for continuing to supply the parts, even though a valid contract was still in force and there was no legal basis for making such demands.
“The court’s decision confirms our view that contracts must be honored, and in a globalized world, suppliers must assume a special responsibility,” Hiller said.