THE FULL extent of Terex’s control of loader crane manufacturer Atlas Weyhausen has been revealed since we reported in last month’s issue on the takeover of Atlas by GKM Value Partners.
GKM’s dealmaker on this acquisition, David Langevin, is a former Terex corporate financier, and it was announced at the time that Terex would be ‘advising’ on Atlas operations.
Within days, Steve Filipov was transferred from his position as Terex vice president for sales and marketing in Europe to president and chief executive officer of Atlas Weyhausen.
Steve Filipov’s first move was to scrap the previously announced reorganisation of Atlas’s manufacturing, planned by the former owners, and instead implement his own crisis-management plan and concentrate cost-cutting on reducing overheads. Instead of closing the components factories in Löningen and Vechta, and stepping up outsourcing, jobs to go will instead be concentrated at head office.
The former owners had planned to lay off 800 employees from its German based workforce as part of the factory closures. Despite the factories remaining open, 585 jobs are still being shed. At time of takeover Atlas employed 1,870 people, with approximately 1,500 in Germany and most of the rest in the UK where Atlas also has a factory.
As required, Filipov has consulted with trade unions on the job cuts. In a memo to distributors, suppliers and employees on 10 August outlining progress achieved in the first 30 days, Filipov said: ‘We must reduce our personnel cost. Unfortunately, the unions have chosen to take their time and evaluate our proposal for a lengthy period. We incur DM2.5m of excess cost per each month this reduction is delayed. To compensate, management chose to implement short work time for all indirect and salaried people to compensate for the excess cost. Management is not on short work week.’ Filipov said last month that there was still a chance that one of the factories may still close in the future, although at the time he did not know which one.
Terex’s control of Atlas is enhanced by the appointment of Bob Halls, previously managing director of Terex’s telehandler company Matbro in the UK, who has moved to Scotland to become managing director of Atlas’s UK operations, Atlas Hydraulic Loaders. He replaced Ron Smith who had only been with the company for six months.
Long-serving UK general manager Steve Francis, who two years ago signed a two-year extension to his contract on reaching retirement age, also finally retires this month.
Halls issued a memo to employees, distributors and suppliers on 13 August outlining a cost-cutting plan for the UK division, including a 40% reduction in employee costs.
He wrote: ‘To enable us to achieve our objectives we have to change the way we do business: reducing the working capital required to run the company; reducing the cost of the products we produce; and reducing the operating expenses to run the company.’ He insisted, however, that ‘we will not let our service, product support and sales effort suffer’.
A similar credo has been laid down by Terex for Atlas Weyhausen in Germany. Its target is ‘to become the market leader in all aspects of wheeled and road/rail excavators, material handlers as well as truck-loading cranes’. The strategy is: ‘maintenance of ‘German quality’ (made in Germany) by in-house manufacturing of key components; improvement of product service and distribution of spare parts; and an aggressive programme to reduce costs by means of targeted rationalisation in production and administration.’
