Cargotec also announced that Hiab’s January to September sales were down 10% over the same period last year to EUR 661, though Hiab’s June to September sales figures were slightly up over the same period last year, to EUR 209m, but orders received were down 14% to EUR 194. Cargotec’s third quarter report blamed Hiab’s poor results on lower demand, increased raw materials and components prices, and a slower-than-expected ramp-up of a component factory in Narva, Estonia bought in 2007.
Cargotec says that the move will affect 700 people, close to 300 in Finland alone. It is starting employee co-operation negotiations at four locations in Finland: Helsinki, Raisio, Salo and Tampere.
Cargotec blames the economic downturn for underused capacity. In a statement, it said: “This requires plans for adjusting capacity and developing the operations structure in order to ensure competitiveness. In order to adjust Hiab’s capacity, a plan has been drawn to consolidate crane manufacturing capacity in Europe into three factories.”
In Finland, its plans call for ceasing manufacture in the Salo, Finland factory, although other functions, including R&D, management, sales support, service and spare parts will remain. It is also planning to begin negotiations aimed at cost savings and better efficiency at its Raisio, Finland unit. Restructuring will not affect Hiab sales and service operations in Finland.
Kalmar will start negotiations with employees about operational efficiency improvements and lowering costs at its unit in Tampere, Finland.
Cargotec parent company and Hiab Oy and Kalmar Industries Oy group head offices in Helsinki will also start employee co-operation negotiations aiming for cost savings and improving efficiency with all personnel groups.
Other restructuring measures adjust capacity and improve operations efficiency in Dundalk, Ireland; Bispgarden, Sweden and Tallmadge, Ohio, USA. Hiab also plans to close a truck-mounted forklift factory in Ohio, USA, to be merged with a joint Cargotec production unit in Kansas.
The third quarter Cargotec report was not all about shrinking Hiab production, however. The company is planning to double production capacity in its Shanghai, China factory, at the same site as the existing Kalmar facility. It said that supply investments will amount to EUR 50m.
The company said that the actions aim, in addition to adjusting capacity, at an annual result improvement of approximately EUR 25 million, though they will cost approximately EUR 35 million.
