Edscha Case

Introduction

Edscha, a company founded in 1870 in Remscheid, Germany, is a tier one automotive supplier. They are organized in two business units: Body components (hinge systems, driver controls) and convertible roof systems. Edscha Group operates globally with 29 locations worldwide and employs 6600 people .

The company is located closed to OEMs in Germany and France which is a competitive advantage. In France, the Edscha production site is in Briey, closed to the main customers PSA and Renault, where 130 employees are working.

There are actually two changes described in the case study, the first one is related to the automotive crisis in 2008 which triggered the insolvency of Edscha Europe in February 2009. The second change, which is a consequence of the first one, is related to the takeover of Edscha Europe by Gestamp Automocion in March 2010 and the impacts on Briey factory.

Why to change?

The first change Edscha had to deal with is due to the external environmental pressures . The automotive market declined sharply in 2008 and Edscha Group sales dropped by 60% in 2008. The consequences of this have been the insolvency of Edscha Europe which directly impacted Briey plant. From a day to another, Edscha Briey could not meet anymore its commitments to customers and suppliers.

This is the organizational pressures that triggered the second change of the study case. Although the integration of Edscha in Gestamp organization has not been completed, there were immediate impacts on Briey plant as the new shareholder has expected a high return on its investment. Therefore, the challenge of Briey is to "make more money" and become more profitable.

What changes?

The change management during the insolvency procedure can be qualified as a first order change, it's an incremental and reactive change requiring an adaptive management of the change . Indeed, the main objective of Sylvie Reynier, plant manager, was to maintain the operations, get parts from suppliers and pay them on the one hand, produce and sale finished goods to the customers on the other hand.

Although Gestamp challenge can be perceived as a kind of second order change by some salaries as they were directly impacted by the change, it's actually a first order change too. In fact, it's an incremental and anticipatory change requested by Gestamp. It involved adjustments in production, processes and structures to gain competitiveness and improve the productivity of the factory , but it did not involve fundamental change in strategy, core value and corporate identity of Edscha. Sylvie had basically three main axes in her challenge: automation of processes, people management as employees are getting older and cost reduction of purchased parts. The first one is an adaptive incremental change but reactive to