Georg Fischer axes jobs in profitability drive
Swiss engineering company Georg Fischer has announced it is slashing 1,000 jobs worldwide as part of a major restructuring plan to strengthen performance.
The company wants to streamline its automotive products and piping operations, as well as its manufacturing technology unit, Agie Charmilles.
The job cuts, which were announced on Tuesday, represent some eight per cent of the total workforce. In Switzerland, some 85 jobs are affected at three Agie Charmilles plants.
Schaffhausen-based Georg Fischer said in a statement that the company believed its current level of profitability to be “unsatisfactory in the prevailing economic climate”.
“We do not want to simply wait for an improvement in the economy. We have therefore decided to carry out a number of measures, which will sustainably strengthen our profitability,” commented chief executive Kurt Stirnemann.
He added that the decision on job cuts had not been taken lightly.
“Nevertheless, we have to do everything possible to substantially increase the value of the company,” he added.
The aim of the plan is to raise operating profit by SFr100 million ($75.83 million) in 2005 and reduce net debt by SFr300 million by the end of 2005.
Closing plants
The measures, which are already being implemented, also include closing manufacturing plants in Europe and the United States, and divesting surplus activities, participations and real estate.
Georg Fischer said it expected the second half of 2003 to show a slight improvement over the SFr42 million in earnings before tax and interest (EBIT) achieved in the first half.
Agie Charmilles, which saw demand fall heavily during the first six months with sales down by almost 20 per cent and operating results in the red, is to close two plants in the United States.
However, the unit expects to return to profitability next year and improve operating profit by SFr40-50 million by 2005.
Georg Fischer also plans to improve its capital base by issuing a subordinated convertible bond of between SFr120-150 million.
The terms will be fixed and announced at a later date. Shareholders will be invited to an extraordinary general meeting next month.
swissinfo with agencies
The Georg Fischer engineering company is cutting 1,000 jobs worldwide in a major restructuring plan.
The company warned that all the job losses would not be achieved through natural attrition.
The aim is to lift operating profit by SFr100 million in 2005 and reduce net debt.
Manufacturing plants in Europe and North America are being closed.
In Switzerland, some 85 jobs are affected at three Agie Charmilles plants.
Georg Fischer warned in July that its first-half net profit of SFr7 million was an unsatisfactory result and that “structural adjustments” were being prepared.
It commented then that there was no sign of a market upswing.
The restructuring will result in one-off charges in 2003.
Georg Fischer had a workforce of 13,685 at the end of June.
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