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| Lübeck - 40 percent idle capacities within a disintegrated IT and electronics market has meant that the major companies are offering their products and services at cost price in order to at least achieve minimum contribution margins and hence contain their losses. Compounding the situation is that the small electronics manufacturers lack purchasing muscle and hence are unable to compete with the major players given that the cost of materials accounts for 60 percent and more of the price paid for the final product.
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| A consequence of this situation is that all the negotiations which have been going on for 12 months with more than 6 potential buyers on the sale of Dräger Electronics have failed.
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| Since Dräger Electronics will over the months to come lose over 50 percent of its present sales to competition, companies around 30 percent and more under the own production costs, Dräger has decided to gradually phase out electronics manufacture at Lübeck by September 2003. The employees have been informed. (Dräger Electronics employs some 120 people, its annual sales are in the region of €20 million).
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| Negotiations are currently being conducted with investors in the German state of Mecklenburg-West Pomerania to the effect that an investor close to Lübeck will build a new electronics factory, specialized in niche market products and hence competitive. The plant would then be run by Dräger. |
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| Should the negotiation succeed most of the people presently employed at Dräger Electronics would be offered a new job not too far away from their present one.
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