Schefenacker Acquires Auto Parts Manufacturer Engelmann and Plans its Incorporation Into the Schefenacker Group

SCHWAIKHEIM and HANOVER and WEDEMARK, Germany, May 11, 2006 --

- Aim is to Continue Production at the Engelmann Sites of Hattorf and Wedemark - Majority of Current Jobs are Assured

- Engelmann's Insolvency Administrator Seagon Sees Big Opportunities for the Long-Term Stabilisation of the Business

- Plan Involves Gradual Incorporation of Engelmann's Divisions Into Relevant Areas of Schefenacker's Business

A decision has been made on the purchase of the insolvent Engelmann Group: "Schefenacker-Erwerbergesellschaft has been awarded the acquisition, which in the future will operate under the name of Schefenacker-Engelmann Spiegel GmbH. Decisive factors in the decision were Schefenacker's vast experience and market knowledge, as well as being an experienced supplier of the automotive industry that is already in good standing and well established with the Engelmann clients. "In Schefenacker we found an investor whose plan will continue uninterrupted production in Germany, Spain, and Mexico as well as provide a long-term solution for the Engelmann Group", explained insolvency administrator Christopher Seagon.

"With the Engelmann acquisition we will strengthen our global position in our core mirrors business", stated Hans-Joachim Lange, Schefenacker CEO. Through the acquisition Schefenacker not only ensures the clients interest for uninterrupted production, but also will increase its international competitiveness. Schefenacker's global market share for its mirrors business will increase by two percent.

The asset deal agreement stipulates that Engelmann Automotive GmbH will be acquired, which includes all production sites and the assets required for business continuation. This will include shares in the subsidiaries: Alfred Engelmann S.A.U in Epila, Spain; Alfred Engelmann de Mexico S.A.U de C.V. in San Louis Potosi; EM Kunststofftechnik GmbH Neustadt/Orla and its Czech subsidiary ELEKTROSPOJ Kabelowa Konfekce S.R.O.. Completion of the agreement is conditional upon approval from the respective authorities.

The two parties did not wish to comment on the purchase price. "We have reviewed all possible financial implications that may occur from the acquisition of Engelmann. In regard to increasing plant capacity, efficiency, and global customer relations, this move not only makes strategic sense, but also business sense", stated Hans-Joachim Lange. Schefenacker has confirmed that the current fiscal year EBITDA expectations will not be negatively effected by the acquisition.

Engelmann has over 1,000 employees in the Group. Through the acquisition the majority of jobs will be preserved. As part of the plan, Engelmann's domestic workforce of approximately 440 employees will become official employees of mypegasus GmbH, a well known "Beschäftigungs- und Qualifizierungs-gesellschaft. As a next step Schefenacker-Engelmann Spiegel GmbH will offer contracts for 300 employees, of which 150 employees will be initially offered temporary contracts for nine months. Those employees with open ended contracts can not be terminated within the following 12 months.

According to Seagon, "the personnel adjustments are necessary because the restructuring efforts were not sufficient in reducing the losses." There were discussions and negotiations with 15 different investors who were interested in the possible acquisition. Each of the interested investors determined that there is a need to make personnel adjustments. The business was in very poor shape when Seagon took over the company as an insolvency administrator. With the support of the clients, who wanted to guarantee their product demands, as well as the dedication of the Engelmann employees and workers' council Seagon was able to stabilize the operating business during his one year of responsibility. It was only possible through these improvements to search for possible investors.

Manfred Heine, chairman of the workers council welcomed the solution: "By being acquired by a competitor offers us the opportunity to strengthen our own market and competitive position. On behalf of the workers' council, I would like to thank all parties for the constructive cooperation during the company's very difficult stage."

The federal state government supports the agreement. Seagon and Dr. Reiner Beutel, Schefenacker CFO, appreciated the very constructive support from the Hanover government during the negotiation process. Seagon summarized the results by saying the following: "Judicial restructuring only succeeds when all parties involved work together."

The mutual agreement for the scheduled integration of Engelmann will take a step by step approach into the respective Schefenacker Group business units. The synergies within the existing Schefenacker sites will be used. "Our most important short-term goal is to continue stabilizing the quality and the delivery reliability, as well as reducing losses through optimising the utilisation of the sites and consolidating purchasing strategies", stated Hans-Joachim Lange.

Background Schefenacker

Schefenacker AG was founded in Esslingen in 1935. The family owned business is a worldwide leader in the production of vehicle rear vision systems and has a leading market position in rear and interior lighting as well as sound systems. In 2005 group revenues totaled EUR930 million. Schefenacker AG employs more than 7,000 workers in 23 production sites and six research centers worldwide.

Background Alfred Engelmann Group

The Alfred Engelmann Group, Wedemark, is a long standing system supplier for the automotive industry. The company's main products are exterior and interior mirrors systems, fuel caps, exterior and interior door handle systems, as well as difficult painted plastic parts. Many leading car manufacturers are among their clients, which include Volkswagen and General Motors (Opel). The company has production sites in Wolfsburg and Wedemark near Hanover, Germany, and branches and subsidiaries in Spain, Czech Republic and Mexico. In 2004 Engelmann Automotive GmbH took control of the insolvent business and later filed for bankruptcy in mid September 2005. Production has since been managed by the administrator, solicitor Christopher Seagon, partner at Wellensiek Solicitors, Hildesheim, Germany.

    
    Media Contact:

    For Schefenacker AG:            For Wellensiek Rechtsanwälte:
    Max Hohenberg                   Dirk von Manikowsky
    CNC Communications & Network    rw konzept - Agentur für
    Consulting AG                   Unternehmenskommunikation
    Tel: +49-(0)-7195-581-1450      Tel: +49-(0)-221-40073-87
    presse@schefenacker.com         manikowsky@rw-konzept.de
    www.schefenacker.com

For Schefenacker AG: Max Hohenberg, CNC Communications & Network Consulting AG, Tel: +49-(0)-7195-581-1450, presse@schefenacker.com, www.schefenacker.com, For Wellensiek Rechtsanwälte: Dirk von Manikowsky, rw konzept - Agentur für Unternehmenskommunikation, Tel: +49-(0)-221-40073-87, manikowsky@rw-konzept.de