Employees caught up in the collapse of Lilium Aerospace say they feel “abandoned” and “cast out into the cold” by senior management and the insolvency specialists winding up the firm, and have hit out at the slow pace of the process that has left them struggling to claim benefits or apply for new jobs.
Additionally, they describe being caught in a Catch-22 situation with the German employment office – or Bundesagentur fur Arbeit (BfU) – which refuses to grant them insolvency payments on the grounds that Lilium Aerospace was never solvent to begin with.
On top of which, Lilium Aerospace’s administrator Robert Haenel, from restructuring firm Anchor, has warned that with cash holdings of a little over €67,000 ($76,100) and an estimated wage bill of €12 million until the end of June, there will be no money to pay staff, or possibly even to fund the insolvency proceedings.
Established just before Christmas, Lilium Aerospace was supposed to take over the business and assets of two cash-strapped Lilium NV subsidiaries and to continue the development of the Lilium Jet electric air taxi.
Hundreds of staff from those two companies – Lilium GmbH and Lilium eAircraft GmbH – transferred across to the new business with the expectation that operations would resume early in the new year.
However, Lilium Aerospace’s short existence came to an end on 21 February when it was forced to file for insolvency after its backers failed to deliver promised funding.
In fact, only a fraction of the asking price was ever paid, leaving the assets of the two subsidiaries in the hands of their insolvency practitioners.
While it spelled the end for plans to resurrect the Lilium Jet – at least for the moment – the effect on the company’s workforce has been stark, with salaries unpaid since December.
Lilium Aerospace effectively missed two rounds of wages while it was still in business – those due at the end of January and February – but the problems faced by staff have been compounded by the tortuous nature of the insolvency and the challenge to obtain necessary documentation.
And former employees are critical of the firm’s management for allowing the situation to develop.
“There has been a lack of leadership since the funding failed to appear; they’ve just disappeared on us,” says one, speaking on condition of anonymity.
“I think it’s right to say we’ve been betrayed and cast out into the cold to go and do something else.”
Having, or obtaining, the right paperwork is key to successfully negotiating Germany’s notoriously bureaucratic welfare system.
But early in the process, staff were issued with a letter by Lilium Aerospace that warned due to the workload and high number of enquiries, certificates of employment – one of the many essential pieces of paperwork – could not be issued “in a timely manner”.
“It can take weeks and/or months to process all requests,” the notice adds.
“Lilium seems to have done everything it can to make it as difficult as possible for us to get support,” says one former employee.
“My anger is directed at the original senior leadership team. But because the company is silent there is only so much you can shout and scream,” adds another.
Staff were at that point in limbo: they had little prospect of a return to work – albeit there was hope that a saviour might be found – but had yet to be made formally redundant and so seeking alternative employment or claiming benefits was nigh-on impossible.
“It was like being stuck between a rock and a hard place,” says another former worker. Because there was still the potential for a last-ditch rescue, he claims the company was holding staff to a three-month notice period in case they needed to be recalled.
“I was rejected from two jobs because they wanted me to start straight away. If you asked for an early release you didn’t hear anything back,” he says.
“On top of which, we couldn’t get unemployment benefits because we were not unemployed.”
In fact, it took until 19 March for those redundancy letters to be issued, almost an entire month after Lilium Aerospace filed for insolvency.
Those notices, sent by Haene, say he has begun to “initiate the closure of the business”.
“A reduction in staff is therefore unavoidable and there is no further employment possibility for you,” he writes.
“I hereby terminate the existing employment relationship with you for operational reasons with effect from the next possible date, subject to the applicable notice period.”
For most employees, the notice period lasts for three months, tying them to the company until the end of June but with no prospect of any salary during that period.
However, even with the lengthy notice period still in place, the arrival of the redundancy notices does allow staff to finally claim unemployment benefit.
But those unemployment benefits are still considerably lower than the other social security payments staff should be receiving but are being denied by the German state.
Under German law, the BfU agency is supposed to settle outstanding wages, capped at €7,500 per month, for a period of up to three months.
However, multiple staff have had their claims for this Insolvenzgeld rejected on the grounds that the company was never solvent in the first place.
“After further conversations with the Employment Agency, we were unable to obtain a change in their decision,” the company writes.
“That’s a real kick in the teeth for us,” says one former employee.
Staff have also been attempting to claw back their missing wages with little success. Some applied directly to Lilium Aerospace, presenting claims and a deadline for payment.
“The claim is undisputed. However, Lilium Aerospace is not able to pay the salaries as there are not sufficient funds,” an online briefing note issued to staff early in the insolvency process discloses.
But the fact is that Lilium Aerospace is effectively a company with no money and no assets.
The size of the shortfall is made clear in a 1 April letter to staff from Anchor – seen by FlightGlobal – that show cash holdings of just €67,434 against a wages bill for April alone of €5.7 million.
Although Anchor estimates the monthly wage demands will fall as overseas employees return home and sever their contracts early, it puts the total salary liability at €12 million until the end of June.
With such a large shortfall, there is also unlikely to be any money to pay for the insolvency proceedings either.
“The insolvency estate is likely to be insufficient to pay the procedural costs and other liabilities,” the letter states.
Faced with mounting problems, former employees bemoan the absence of assistance from the company.
“The continuing lack of support from management and the insolvency administrators adds insult to injury,” says one former Lilium Aerospace employee.
“It was irresponsible to bring everyone back to work when the money wasn’t there. And as the frontline troops, if you like, we are the ones suffering.
“The hoops to jump through to get welfare support are difficult and are being made incredibly tough by what Lilium has decided to do. We have received no support from them; they’ve just gone complete radio silent,” he says.
That view is shared by another former staff member, who says: “We haven’t had support from the company for several weeks now; even the insolvency people don’t communicate anything.”
Although he highlights the support from a community group of former Lilium staff on WhatsApp, he says the situation is “getting darker and darker every day”.
Another points to the effects on his health: “A lot of us have gone to the doctors with stress. These last months have been draining and it’s not fair on my wife and kids either.
“It’s getting to the stage where we are relying on child benefits to put food on the table, others are having to lean on friends and family.”
To highlight their plight, former staff have organised a protest rally for 1 May in Munich, alongside the SPD political party and IG Metall trade union.
