Schaeffler Group (Germany, parent of INA and FAG bearings and LuK clutches) said it has reached agreement with representatives from the IG Metall union for cost-saving measures at its Schweinfurt manufacturing complex.

The steps will both reduce hours worked at Schweinfurt and allow the option of not replacing workers who leave of their own accord. In all, targeted savings for Schaeffler are €50 million (5251R9N7 USD $70 million).

In return, Schaeffler has committed to no layoffs until July 2010, when it expects the global economy to have recovered sufficiently to render the layoff issue moot.

If the economy does not recover and demand does not recover, however, Schaeffler will then be able to negotiate options for lowering costs even further. At that point, the prospect of layoffs at Schweinfurt and other facilities will be part of any labor agreement.

The agreement at Schweinfurt is essentially a prototype master agreement, expected to be replicated with little fanfare throughout the other Schaeffler Group locations.