20.10.2008

Hiab announces restructuring plans

As announced last month, Cargotec, parent of Hiab loader cranes, has implemented a major retrenchment programme, due to lower demand and profitability.

The company has now issued a few more details of the measures that it will take and which will result in the laying-off of around 700 employees.

The measures are aimed at "adjusting capacity at Hiab to closer match the prevailing market situation, while helping to improve profitability at both Hiab and Kalmar."

The bulk of the changes will affect personnel in Finland, Sweden and the USA, with over 300 of the groups 1,700 employees in Finland set to go. Cargotec has started employee co-operation negotiations at four locations in Finland: Helsinki, Raisio, Salo and Tampere.

The cutbacks will have a €35 million impact on the 2008 results in terms of costs and write downs. The aim is to have a €25 million positive effect to the bottom line in 2009.

According to Cargotec, Hiab's capacity is not in fully employed and therefore "requires further development of the operations structure in order to ensure future competitiveness." The plan will consolidate European crane manufacturing capacity into three facilities.

The rationalisation will include a cessation of manufacturing activity at the Salo plant in Finland although the Salo based Research & Development, sales support, service and spare parts functions will remain there. Alternative solutions for the plants production facilities are being looked at. Hiab has also opened negotiations aimed at achieving cost savings and improved efficiency at its Raisio plant, also in Finland.

Meanwhile at Kalma, where profitability has lagged behind sales growth and the division has missed profitability targets, restructuring measures will focus on improving efficiency and lowering fixed and indirect costs. Kalmar has opened negotiations at its Tampere plant in Finland, which is likely to result in some headcount reductions.

The cutbacks in Finland will also include reductions at the Cargotec, Hiab and Kalmar head offices in Helsinki cutting across all personnel groups.

Efficiency and restructuring measures have also been started at Hiab's locations in Dundalk, Ireland; Bispgården, Sweden; and Tallmadge, Ohio, USA.

This will include the closure of Hiab’s truck-mounted forklift manufacturing unit in Ohio. Production will be moved to a joint Cargotec production unit in Kansas.