Factory workers and staff of FAG Kugelfischer AG, now in its third week of a hostile takeover effort by INA Holding Schaffler KG, have begun preparing for the presumed success of the bid.

Although FAG senior management continues to wage a vigorous battle against the effort by INA, eBearing's sources indicate that most other employees now accept the takeover as inevitable.

INA has been remarkably successful in buying large blocks of FAG shares, both on the open market and in private transactions. INA now holds an estimated 25% of FAG's outstanding shares, making the company FAG's largest shareholder by far.

FAG's factory employees are represented by a works council, and INA has gone on record with its promises to the council if their takeover is successful. INA has pledged not to close FAG production facilities or lay off any of its 18,000 employees.

FAG works council President, Klaus Weingart, in numerous interviews this week indicated workers are preparing for the change in ownership. "To arm us for the prospect of a takeover, we want to have a wage agreement in place that formalizes all the commitments made by INA," he said.

That its employees are accepting the takeover as inevitable is not going over well with FAG senior management, which had been counting on support from employees and shareholders to fight off INA. With shareholder support obviously lacking, the company had been pushing its employees for visible shows of support. Another major setback for the company occurred last week when its long-time house bank, Dresdner Bank, abruptly terminated its relationship and joined a consortium of powerful banks backing the INA bid.

A FAG spokesman said, "...that doesn't make our job any easier."