Palfinger cuts jobs
By Euan Youdale25 November 2008
During the first nine months of 2008 growth in revenues and earnings of the Palfinger Group was still satisfactory, it said, mainly due to the high order backlog at the beginning of the year and inorganic growth.
However, particularly during the third quarter 2008, a significant decline in demand was recorded in some of the core markets, including Spain and Great Britain.
"Current economic developments and forecasts indicate that there will be no recovery in the months to come. In recent weeks, there were more and more signs that additional markets such as Germany and France, as well as Eastern Europe, including Russia, and South America would be affected by the weak macroeconomic environment. Against this backdrop, capacity utilisation in production was reduced by half as compared to the beginning of the year," added the company.
The Group has reacted by adjusting capacities and increasing its focus on additional savings potential. "Palfinger currently has a staff of around 5,000 employees with around 1,100 working in Austria. So far we have fully exploited our flexible structures in order to retain our core personnel in spite of the weak capacity utilisation. As in a case of a recovery it is precisely those highly-trained employees that we will need. However, we now feel compelled to cut down on our capacities and our fixed costs to ensure that we are well equipped for the market situation that is expected for the next months and the year 2009," Explains Palfinger CEO Herbert Ortner.
This means Palfinger will cut 91 jobs in Austria, leaving the company with sufficient capacities to increase production by up to 50% if necessary. A redundancy package has been prepared by the company. "This under-utilisation will be compensated for by means of short-time work until further notice. This means some work-free Fridays, an extension of the Christmas holiday by one week, and, for the majority of the Austrian staff, a reduction in working hours by 20% with partial compensation for the missed working hours."
Retaining over-capacities means a deliberate short-term reduction in profits, but with a view to a recovery this is designed to secure the company's leading position in the long run, it said.
"Recently, we achieved one record year after the other, and at the same time we adjusted our organisational and cost structures to the increased capacity utilisation. Therefore, we are approaching these difficult times from a strong position, and we are determined to get through this situation in the best possible manner. We are aware of the fact that our employees are the central factor of success. This view is also shared by the Supervisory Board and the Palfinger family as the majority owners," added Ortner.