Staff go at Terex as profits drop
23 October 2008
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Terex announced job cuts as it reported financial results for the third quarter of 2008. The results showed a US$ 2.2 million charge associated with reducing staff levels with further reductions pending.
“In aerial work platforms the company reduced its global workforce by -6% since June 2008 and in the fourth quarter a further -18% reduction is expected,” said Tom Riordan, Terex president and COO.
“We’ve adjusted production lines to short time work weeks in the construction sector and cut 141 jobs. We envisage a further -17% reduction in staff levels across our worldwide operations,” continued Mr Riordan, “and in road building we have reduced the workforce by 98 people.”
“In the materials and processing division we’ve cut production levels and reduced our contract staff levels,” continued Mr Riordan. “We will implement an extended winter shut-down this year and shorten working weeks. We also expect to further reduce our use of independent contractors and also cut staff levels by 160.”
Results
Terex overall recorded sales in the third quarter of US$ 2.5 billion, up +14.5% on the US$ 2.1 billion recorded in the same period of 2007. However net profit dropped -33.8% to US$ 93 million from the US$ 151 million in the same period last year.
Sales in the construction segment increased +4.9% to US$ 474 million, although following acquisitions (US$ 49 million) and foreign currency exchanges (US$ 16 million) net sales showed a -10% decrease on the same period last year.
Sales in the materials and processing division rose +25.4% on the same period last year to US$ 662 million, although net figures following acquisitions and currency exchanges showed a more modest +18% increase.
In road building and utilities, sales of US$ 175 million represented a +17.7% growth over the third quarter of 2007, although in net terms following currency exchanges and acquisitions this figure dipped to +14%.
The cranes division, with sales of US$ 717 million, improved turnover on like-for-like periods by +36.2%, and even following currency exchanges maintained a +26% growth in net sales.
“While we continue to make progress on our improvement initiatives, the current environment is challenging, marked by a continued global credit crisis and worsening economic conditions, particularly in the US and western Europe,” said chairman and CEO Ron DeFeo.
“The cranes and mining businesses continue to grow, in particular in developing markets, where we expect current positive trends to continue,” said Mr DeFeo. “In light of our overall expectations, we have taken or initiated several actions to properly size our organisation and production levels. Additionally, we have further heightened our focus on cash generation during this time of uncertain access to credit.”
