Trailer market has collapsed: Schmitz Cargobull prepares all
locations for a longer depression period

• Registration figures declined drastically throughout Europe: Trailer manufacturers are suffering from the drop of orders by 94 percent in the first quarter of 2009
• A quick market recovery cannot be forecasted
• Schmitz Cargobull AG presents a comprehensive package of measures for the reduction of capacities
• More reduced working hours at all locations
• The Board has begun with discussions for a socially responsible reduction of employees
• Shareholders support the programme for securing the future

Horstmar, 7th April 2009 – The massive reduction in orders and a prolonged weakness in the transportation branch throughout Europe have now made it necessary for Schmitz Cargobull AG, Europe's market leader for semi trailers, to present a comprehensive package for measures for restructuring. After the enormous leaps in growth of the previous years, there is a current considerable over-capacity for the entire trailer branch. The early actions that have been initiated by the Board of Schmitz Cargobull since autumn 2008 to compensate the economic slowdown are no longer sufficient when faced with the drastic slump in the market. "Coming from a position with a solid financial basis, we now have to make these painful steps to make the company sustainable for the future", a comment from the CEO, Ulrich Schümer. Discussions with the employee representatives concerning the necessary reduction of employees as well as cuts in the overhead costs have begun at the beginning of this week.

The trailer market has collapsed in the first quarter of 2009. The order level tends towards zero. All manufacturers are preparing themselves for a dramatic reduction in the commercial vehicle market in Europe for 2009. The Automobile Industry Association (VDA) has stated a historical downturn with tremendous speed and previously unknown intensity. The order income for semi trailers fell by 94 percent in the first quarter. "In 2009, we are expecting a decline in sales between 70 and 90 percent", a comment from Ulrich Schümer, "as an increase in the commercial vehicle market is not expected at the present time". This is equivalent to an annual production of less than 10,000 vehicles. In contrast, in the record financial year of 2007 / 2008, the employees built more than 66,000 vehicles at Schmitz Cargobull.

All business fields are affected
The package of measures affects all business sectors of Schmitz Cargobull at all locations in Germany and Europe. The reduced working hours that have been slowly introduced in the factories in Gotha, Altenberge and Vreden since autumn will be extended to the other German locations in Berlin and Toddin within the next few weeks. The production has been stopped at one factory each in Lithuania and England. The production in the Spanish factory in Zaragoza has also been reduced considerably. Today, 4,000 employees belong to the Schmitz Cargobull Group. A clear point is that all approximately 350 temporary contracts will expire and will not be extended. At the same time, the Board emphasises that all trainee contracts (approx. 180) shall be fulfilled. Furthermore, it has also been agreed that each trainee can remain in the company for a further year after completing their training. "We will use the possibilities of short-time work as far as possible, we shall, however, not be able to get around a socially responsible reduction of approx. 500 employees of the permanent working staff", an emphasis of the CEO, Ulrich Schümer. Negotiations will be held with the employee representatives over the next few weeks concerning the instruments such as qualification and further education, early retirement, part time and agreements to terminate contracts. Furthermore, the board members, executive staff and senior management have prepared an aid fund where they will contribute a part of their wages on a voluntarily basis. This money should help those colleagues that especially suffer under financial penalties as a result of the reduced working hours.

Owners face their responsibilities
The shareholders are continually informed about the business developments and the planned economic measures. Their unlimited responsibilities remain with the employees. Ulrich Schümer, who is also responsible as Chief Financial Officer, explained that "The financial position of the company is solid due to the permanent re-investment of the profits as well as a strong own equity base of 63%". A loss in 2009 / 2010 would not threaten the substances of the company. "However, the company must carry out these drastic cuts to secure the future of the company and a long term survival. We will not only reduce personnel costs. The overhead costs will also be considerably reduced", a comment from Ulrich Schümer.

The sales department has been dealing with additional activities in the market since summer 2008. Ulrich Schümer explains that "We will not be saving on measures that strengthen the quality and technological leadership of our products and represent them on the market". Despite the dramatic over-capacities in the trailer market, Schmitz Cargobull will also not be jumping into a shamble of a fight for discount that would lead to irreparable damage to the entire branch. The Board is convinced that "Our customers expect a product of quality". These demands should not be sacrificed, especially in critical times as this illustrates the central column of the long-term growth strategy.

www.cargobull.com