CINCINNATI — Cincinnati Milacron Inc. will lay off an undisclosed number of employees at its German injection press factory, Ferromatik Milacron GmbH, as Germany continues to face a slow economy.
``The German economy is still very sluggish,'' said Harold Faig, vice president of plastics machinery worldwide for Milacron. He said the company will lay off some employees at Ferromatik Milacron in Malterdingen, but declined to say how many.
Cincinnati Milacron disclosed the cost-cutting moves when it announced year-end financial results.
Overall, Milacron's Plastics Machinery unit enjoyed 1996 sales growth of more than 15 percent. The company said that sales from D-M-E Co. helped offset a ``very soft'' North American market for injection presses in the first half, to push sales past the $600 million mark in 1996. North American press sales rebounded in the second half.
Still, poor economic conditions in Europe, especially Germany, dampened machinery results through the entire year, said Daniel Meyer, chairman and chief executive officer.
In Milacron's year-end financial statement, Meyer said: ``In response to the prolonged economic softness in Germany, we are currently incurring cost-cutting expenses in our Ferromatik operation, which will likely keep first quarter (1997) earnings a little below year-ago levels.
``These measures will begin to pay off quickly, however,'' he said. ``We expect positive year-over-year quarterly comparisons throughout the rest of 1997.''
However, Faig said he thinks European business will not rebound this year.
``We're balancing the volume against the expenses to protect the profitibialiby of the business. It's still a very profitable busines over there,'' he said.
Milacron reported 1996 plastics machinery sales hit a record $662.4 million, a 16.2 percent increase from 1995 sales of $570.1 million.
Milacron bought D-M-E, a Madison Heights, Mich.-based manufacturer of mold bases, hot-runner parts and other mold components, in late 1995. For the full-year 1996, D-M-E contributed about $150 million in sales, Milacron said.
Ownership of D-M-E also helped fuel a 9 percent increase in the machine segment's operating profit, which was $59.2 million, up from $54.3 million in 1995. Operating margin was 8.9 percent of sales, down from 9.5 percent the year before.
Milacron's plastics machinery operations enjoyed a strong fourth quarter. Including D-M-E numbers, fourth-quarter sales were $187.8 million, up 40.8 percent from $133.4 million in the fourth quarter of 1995. Excluding D-M-E's $40 million in quarterly sales, machinery sales still increased by 9 percent, the company said.
Milacron's Plastics Machinery unit is based in Batavia, Ohio. Corporate headquarters is in Cincinnati.
Companywide, Milacron reported 1996 sales of $1.73 billion, a 4.9 percent gain over $1.65 billion in 1995. Companywide profit was $66.3 million. That number was 37.2 percent lower than 1995 profit of $105.6 million, but the 1995 figure included two one-time gains from divestitures, including proceeds from selling the Electronic Systems Division. Excluding those nonrecurring items, Milacron actually generated a profit of $57 million in 1995. In addition to plastics machinery, the firm makes machine tools and industrial products, including drill bits and grinding wheels.