Germany's Karmann files bankruptcy

[April 08, 2009]  FRANKFURT (AP) -- German auto company Karmann, which made the classic VW Karmann Ghia two-seater from the 1950s to the 1970s and also has built convertibles for Audi and Chrysler, filed for bankruptcy protection Wednesday, blaming the sharp decline in demand for cars for its predicament.

Karmann said in a statement that it faced "insolvency in view of impending financial obligations."

Osnabrueck-based Wilhelm Karmann GmbH, which employs nearly 7,000 workers, said the fallout from the global financial crisis and the sharp decline in demand for cars had undermined a restructuring plan it drew up last September.

The company, like other auto makers, has been buffeted by a startling drop in demand for new cars from consumers reluctant to spend.

That caused the company to cut 1,800 workers last year after it completed production of the Chrysler Crossfire model for the U.S. automaker, the Mercedes-Benz CLK for Daimler AG and Audi AG's A4.

In a statement, Karmann said it aims to reorganize and restructure its operations with an aim toward preserving its future and the jobs of its workers and would continue operations. It has facilities in Germany, the United States, Portugal, Mexico, Britain and Poland.

Karmann has been in business since 1901 and built the Volkswagen Beetle convertible, a job it undertook in 1949 after its factory, destroyed during World War II, was rebuilt.

That was followed by the Volkswagen Karmann Ghia, a two-seat, low-slung convertible attached to the chassis of the all-purpose Beetle that was manufactured from 1951 to 1976.

It later built versions of Ford Motor Co.'s Escort line and Renault's 19 convertible. In 1995, Karmann designed a retractable hardtop roof for the Mercedes-Benz SLK that slid back at the push of a button.

Karmann also worked with South Korean automaker Kia on its Sportage sport-utility vehicle

When Wolfsburg-based Volkswagen AG reintroduced the modern Beetle, Karmann was tasked with building the convertible, version.

Since 1949, the company has built more than 3.3 million cars.

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On the Net:

http://www.karmann.com/

[Associated Press; By MATT MOORE]

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