Hostile takeover by Stellantis saves 600 jobs at Punch Powertrain in Sint-Truiden

The French-Italian car manufacturer Stellantis (including Peugeot, Citroën, Fiat) has seized power in the Punch Powertrain factory in Sint-Truiden. It completely absorbs the Punch Powertrain PSA E-Transmissions joint venture, which makes drive systems for hybrid cars.

Punch Powertrain was acquired by the Chinese Yinyi group in 2016. At that time, the Limburg company mainly made transmission systems for the Chinese market. These activities were transferred to China, which meant that after a major restructuring, new activities had to be found. The development and production of gearboxes for hybrid cars was one of them. Punch Powertrain set up a joint venture with what was then called the PSA group (with the brands Peugeot and Citroën, which was later merged into Stellantis). The intention was that Stellantis would eventually leave the joint venture, but now the opposite has happened: Stellantis seizes power.

Chicken with golden eggs

The switch to hybrid gearboxes required a lot of investments. The Yinyi group was no longer able to supply the required capital due to real estate issues in China. Stellantis did, and in return it received more and more shares in the joint venture. Now the moment has come when Stellantis has absorbed all the shares and has become de facto owner of the factory.

“The workers in Sint-Truiden have all been transferred to the joint venture and no longer work for Punch Powertrain itself. The 70 employees still work for Punch Powertrain,” says Nadia Gueroui, union secretary at ACV. It is highly unclear what the future holds for the financially strapped Punch Powertrain, now that it has lost its most important operational activity. “We are happy that there is now job security for the workers, even if this comes after a hostile takeover by Stellantis. It proves that the factory is the goose that lays the golden eggs and Stellantis really needs it,” says the trade unionist.

The factory in Sint-Truiden makes the main parts for approximately 600,000 hybrid gearboxes per year. These parts are transported to factories in Metz (France) and Mirafiori (Italy), where they are assembled into complete gearboxes. Metz is home to the old Peugeot engine factory, which now builds engines for several brands in the Stellantis group. Fiat’s headquarters and main factory are located in Mirafiori.

Gueroui of the ACV hopes that the factory in Sint-Truiden can continue to work as a supplier to the other Stellantis factories and that production will not ultimately be completely transferred to France and Italy. “The factory in Sint-Truiden has been completely renovated. I hope that Stellantis will continue to work here for a long time and perhaps purchase more volumes. The group needs 1.5 million hybrid gearboxes per year. The annual capacity of 600,000 copies in Sint-Truiden can easily be increased.” A longer-term threat is electric cars, which do not have a gearbox.

From Daf to Dumarey

The factory in Sint-Truiden has had a turbulent history. It was built in 1972 by the Dutch truck manufacturer Daf, which also made cars at that time. These car activities were taken over by Volvo, making the site in Sint-Truiden a Volvo factory. The factory subsequently came into the hands of the German ZF, a major supplier to the automotive industry. In 2006 it sold the factory to Punch International, the then industrial holding of businessman Guido Dumarey. The current name dates from that period. In the aftermath of the credit crisis, Dumarey had to sell Punch Powertrain for several tens of millions of euros to the investment companies Gimv and LRM (Limburge Reconversiemaatschappij). They were able to sell the company to the Chinese Yinyi group for 1 billion euros in 2016, which generated hundreds of millions in added value. Dumarey remains bitter about that episode to this day. The entrepreneur started again in the sector after taking over a GM gearbox factory in Strasbourg. This mainly works for the more expensive brands of the BMW and Mercedes-Benz groups.