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CINCINNATI—Cincinnati Milacron Inc.'s German injection molding press subsidiary, Ferromatik Milacron GmbH, suffered a first-quarter operating loss of $3.5 million — half of that from severance pay for laid off workers.

Overall, Milacron's Plastics Machinery unit in Batavia, Ohio, reported first-quarter sales grew by 21.5 percent to $149.2 million, from $122.8 million in the first-quarter of 1996. Segment earnings fell to $9.2 million from $10.7 million, a 14 percent drop.

Milacron first disclosed the German restructuring in February, when it released 1996 year-end results. The company released additional details April 22, when it presented first-quarter 1997 results at its annual shareholders meeting in Cincinnati.

The Ferromatik restructuring, including the layoffs, happened in the first quarter, which ended March 22.

Milacron officials have not specified how many employees have been laid off at the Ferromatik Milacron factory in Malterdingen, Germany. One-time severance costs totaled $1.8 million, the company said.

The German work force cutbacks reduced net profit in the first quarter, which is historically Milacron's weakest quarter.

But Daniel Meyer, chairman and chief executive officer, told shareholders the move will increase profitability for the rest of 1997.

The machinery picture is brighter in the United States, traditionally Milacron's biggest and most-profitable market. Earnings from U.S. sales ``improved over the first quarter of 1996 but remained under pressure as efforts focused on gaining share in a relatively weak market,'' according to the Cincinnati company's first-quarter report.

In the quarter, new orders increased to $151 million, from $120 million a year. Mold component supplier D-M-E Co., based in Madison Heights, Mich., accounted for about half of the gain, Milacron said.