2023-10-20 18:27:11
Deep cracks are beginning to appear in Peter Spuhler’s empire
The Rieter industrial group is once more cutting hundreds of jobs. Three other companies in which the Thurgau entrepreneur is a major shareholder are also not doing well.
Heavily challenged in four of his companies: Peter Spuhler.
Photo: Urs Jaudas
For the second time in just three months, the Thurgau railway entrepreneur Peter Spuhler has lost his patience: under the impression of collapsing orders and a sharp drop in share price, the traditional Winterthur company Rieter, which he dominates, announced on Friday morning that it was cutting a further 400 to 600 jobs.
This is the second piece of bad news from Rieter in just three months. On July 20, the spinning machine manufacturer announced that it was cutting around 300 jobs in administrative functions. In Winterthur, where the company’s headquarters are located, this first wave of cuts affected around 100 jobs.
In the second wave of cuts now announced, Rieter is cutting up to 600 jobs in factories in Germany, the Czech Republic, China and India. In total, the company is cutting up to 900 jobs. In the middle of the year it employed 5,555 people worldwide.
Spuhler holds a third of Rieter’s shares, making him by far the largest shareholder. He won’t be happy that the share price has collapsed by 66 percent since its peak a good two years ago due to sluggish business activity coupled with rising material, energy, labor and production costs. In the past six months alone, the decline was almost 20 percent.
Now Spuhler is using the savings hammer. This was decided by the board of directors, on whose strategy committee the main shareholder sits. Incoming orders fell by 59 percent in the first nine months of this year, said CEO Thomas Oetterli.
Demand for textile machines has collapsed worldwide, except in China. Business with construction and spare parts has also weakened. At the same time, high electricity and raw material prices and rising interest rates led to higher costs.
Swiss Steel’s existential distress leads to calls for state aid
Rieter is not Spuhler’s only problem child. The entrepreneur is also a major shareholder in the Lucerne steel manufacturer Swiss Steel, the Winterthur auto supplier Autoneum and the Thurgau railway manufacturer Stadler Rail – and things are not going well for any of them at the moment.
The situation is worst at Swiss Steel. The company, which was once called Schmolz + Bickenbach and was on the verge of bankruptcy four years ago, is once once more threatened in its existence, as the “SonntagsZeitung” recently wrote. Due to the drastically increased energy costs, Swiss Steel made a loss of almost 100 million francs in the past twelve months.
The share price has been falling for some time. It has lost 59 percent of its value within a year and 29 percent within the past six months.
Spuhler is particularly affected by this because he has held 20 percent of the shares since he bought a good 8 percent of Swiss Steel shares from major shareholder and Amag owner Martin Haefner in June. The third major shareholder is the internationally sanctioned Russian oligarch Viktor Vekselberg.
The Board of Directors has decided on extensive cost-cutting measures. Personnel costs are to be reduced, all non-essential expenses are to be eliminated and seven factories in Eastern Europe are to be sold.
It is uncertain whether that will be enough. That’s why the call for state aid is now being heard. SP Council of States Roberto Zanetti and SVP National Councilor Diana Gutjahr have submitted two motions to support steel production in Switzerland. So you can imagine temporarily waiving the electricity grid surcharge for the steelworks.
Since steel production at the Swiss Steel plant in Emmenbrücke LU consumes huge amounts of energy, this would significantly reduce the burden on the income statement. Spuhler, who, like Gutjahr, sat in the National Council for the Thurgau SVP, denies that he is behind the initiative.
Stadler Rail is suffering from the strong franc
Even at Stadler Rail, the company Spuhler made large and successful, things are not going well at the moment. Since the IPO on April 12, 2019, the share price has fallen by 29 percent, and by as much as 37 percent since its peak three and a half years ago. In the past six months alone, the decline was a good 14 percent.
Since Spuhler holds 41.5 percent of the shares, this price drop hits him particularly hard. This is due to the increasingly strong Swiss franc and higher energy and raw material costs.
In August, Spuhler celebrated the record high order backlog of 25 billion francs. But because not all of Stadler Rail’s contracts are insured once morest inflation and currency risk, the originally planned profit margin is melting away.
Other companies also have this problem, but it is particularly big at Stadler. Several years pass between the submission of the offer, the signing of the contract and the delivery of the ordered trains.
It is uncertain whether Spuhler can reverse the downward trend. Already in March he had to push back his medium-term goal of increasing the margin to 8 to 9 percent. The major bank UBS writes in a new report that given higher energy and raw material costs and currency shifts, it is unlikely that the target will be achieved within the next two years.
Autoneum hasn’t moved for years
Spuhler is also unlikely to be happy regarding the auto supplier Autoneum. Since its peak a good six years ago, the share price has lost 65 percent. In the past six months it was 15 percent.
Spuhler is Autoneum’s main shareholder along with the industrialist Michael Pieper. The two have formed a shareholder group that holds 38.5 percent of the shares. They are the two most influential figures on the seven-member board of directors.
Autoneum benefited from the increase in production volumes among car manufacturers in the first half of the year and was able to significantly increase sales and profits. But the recovery following the end of the pandemic was short-lived. Due to the slowdown in global economic growth, car production is already stagnating once more. It is unlikely to recover in the near future, says analyst Walter Bamert from Zürcher Kantonalbank.
But the up-and-down cycles that are common in the auto industry cannot explain the collapse in Autoneum’s share price. Over the past five years, the company has had to reduce its profit targets several times. Sometimes there were home-made problems, then the chip shortage, then the Ukraine war.
It is quite possible that Spuhler will soon run out of patience with this venture too.
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