Worst scenario for Van Hool: 1,116 jobs will disappear (update)

In stormy weather since the Covid-19 pandemic and the following crisis, Belgian bus and coach builder Van Hool production workers face the ultimate doom scenario. On Monday’s ultimate works council, the unions got the grim message that 1,116 of currently 2,494 jobs at the company’s main factory in Koningshooikt (Lier) will disappear by 2028, 834 this year.

From these 834 jobs, 659 will be compulsory redundancy, 115 older employees eligible for early retirement (SWT), and 20 will be ‘voluntary’ dismissals. Each following year, 27 more employees will have to leave, 228 in the last year. As leaked before, the whole bus production will move to Skopje, Northern Macedonia.

Not out of danger

But even then, Van Hool isn’t out of the danger zone of going belly-up, as new financing is needed urgently. At least €45 million will be required, and an extra 15 million will be needed for the severance pay. If there is no agreement with the ‘stakeholders,’ in case the banks and the family owning the company, bankruptcy will follow on March 31st.

The Flemish government said earlier that it is willing to temporarily step into Van Hool’s capital to save the bus builder, but only if a private investor who can get the company back on the rails is found to invest, too.

‘Meaningful employer’

Co-CEO Marc Zwaaneveld said in a press release: “We understand the impact this plan has on employees and their families, and it is difficult for us to take this step. However, given the urgent situation in which the company finds itself, it is essential to take these measures to secure a sustainable future for Van Hool. With this Van Hool Recovery Plan, we will remain a meaningful employer in Flanders.”

Last week, business newspaper De Tijd leaked the news ahead of the council, where crisis manager Mark Zwaaneveld presented his restructuring plans. The unions counted on a doom scenario of at least 600 jobs feared to be lost, but the sour reality is that it will be double that, as no partner has been found to help Van Hool out of the swamp. And the company still threatens to get a ducking..

Waiting for Flemish government

The inner cabinet of the Flemish government, which stipulated an external co-investor as a condition to step into the capital to save the ailing firm, was deliberating behind closed doors on Friday. It was decided that an external audit bureau would be engaged to analyze the restructuring plan Zwaaneveld will unfold on Monday and decide whether further governmental support is needed.

It’s now clear the sources quoted by De Tijd were right, as the whole bus and coach production will move to Van Hool’s plant in Macedonia. In 2013, the company moved part of its production to Macedonia to avoid Belgium’s high wage cost. Since then, the Belgian branch has had to focus on ‘difficult’, highly technological buses with high added value.

The less weakened department for industrial vehicles will remain in Koningshooikt, as would the R&D department. Zwaaneveld now confirms the latter. Van Hool builds some 4,000 units a year in various truck trailers (semi-trailers, box trucks, low loaders, truck bodies, road tankers, gas tankers, tank containers, gas tank containers, bulk containers, and more).

Not like a bolt from the blue

The doom scenario for the Belgian bus builder doesn’t come like a bolt from the blue. Van Hool has been in dire straits for many years, mainly due to internal fights within the family that owns the company and has survived several crises, except for the coronavirus pandemic and following supply shortages and geopolitical conflicts, which seem to be the fatal blow.

They have seriously impacted the group’s financial results. Sales of luxury coaches, in particular, which account for up to 80% of turnover, came to a complete standstill from 2020 until 2022, causing losses of up to €60 million a year. But also in buses for public transport, Van Hool had to catch up with areas as it was a pioneer in hydrogen buses but bet on the wrong horse.

According to the latest figures published for 2022, Van Hool made a net loss of 18,5 million euros and saw its outstanding debt grow to €200 million with the banks and an additional €34 million with the social security fund. As the Flemish government stands surety for Van Hool’s debts through Girand, its contingency fund, the Flemish taxpayer risks footing the bill for €30 that will likely be lost.

Beaten by Chinese BYD

That initiated a stream of snide comments from opposition politicians, analysts, and trendwatchers, reproaching De Lijn and its chaperon Minister of Mobility, Lydia Peeters, for buying cheaper Chinese buses from BYD.

But while Van Hool – like many other Western bus builders – desperately seeks parts like batteries, the Chinese giant builds its own and manages the whole (low-cost) production cycle. Lydia Peeters told the Flemish Parliament this week that De Lijn will put up a new tender for electric buses by the summer, but that could come too late.

It’s a pity, as in 2021, Van Hool presented the TDX25E Astromega, its first double-deck electric coach, targeted to the US market. It offers a range of 500 km for 69 passengers, 18 on the lower deck and 51 on the upper deck. Apparently, at that time, the company hoped demand for double-deck coaches, which was nowhere as high as in America, would remain.

Gift from the gods

In January, the news broke that after signing last year a contract with Qbuzz, a public transport operator in the Netherlands, to deliver 54 battery-electric buses of its latest type A battery-electric city bus, Van Hool may deliver another 112 before the end of this year.

That would be a gift from the gods, as up to 65% of the employees in Lier have been technically unemployed since the pandemic. But now it’s clear that this ‘gift of the gods’ will find its way to Skopje.

The A-model line was presented in Paris in June 2022 and comes in four lengths: 12 m, 13 m, 18 m, and 24 m. It gets a zero-emission drivetrain that can be battery-electric, fuel cell on hydrogen, or fed with a pantograph by an overhead contact wire, the so-called trolleybuses.


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