Struggling finances plague German automotive supplier

The Polish subsidiary of AE Group, a company specializing in aluminum castings for the automotive industry, has filed for insolvency and ceased production in June 2025. This decision comes after a series of challenges that began in 2024.

The insolvency administrator, Romy Metzger, has cited sharp rises in energy and raw material prices, geopolitical uncertainties, and a difficult environment in Germany from an investor's perspective as factors contributing to AE Group's collapse. The company's difficulties are largely due to weak demand from the automotive industry, a trend that has been affecting many suppliers in the sector.

AE Group's plants in Gerstungen, Thuringia, and Nentershausen, Hesse, will close by the end of 2025, resulting in the loss of jobs for around 650 employees. However, a social plan is being implemented to cushion the impact. This plan includes paying wages for up to six months and providing training and support in finding new jobs.

Cost-cutting measures at Volkswagen in 2024 put numerous suppliers under pressure, and the crisis at AE Group is indicative of the tense situation facing many German automotive suppliers. The closure of AE Group's plants is a significant blow to the entire supplier industry, as the company was a significant player in the market.

Since 2024, several investors attempted to take over AE Group, but none succeeded. Most investors withdrew during the M&A process, and the only remaining bidder could not provide credible financing for the deal and ongoing operations, resulting in the failure of the takeover efforts. No buyer was found for the AE Group's business, and no investor was found to save the company during insolvency proceedings.

The Gerstungen plant, with 549 employees, and the Nentershausen plant, with 134 employees, will be closing their doors for good. The crisis at AE Group is a stark reminder of the challenges facing the automotive industry and its suppliers in the current economic climate.