Austrian injection press maker Engel Holding GmbH may cut as many as 400 jobs across its plants at Schwertberg, Dietach and Sankt Valentin, according to local news reports.
Schwertberg-based Engel told the Austrian press at the end of April that its plans could affect up to 20 percent of its workforce in the states of Upper and Lower Austria, although that did not refer specifically to job losses.
Austrian newspaper Kurier reported May 13 that plans are in hand to extend a working arrangement covering 1,800 of Engel's 2,200 Austrian employees. The pact, due to expire in June, would be extended to September.
However, the Kurier report quoted Engel marketing director Gerd Liebig as saying the extension will not be sufficient for the company to deal with its decline in orders of about 60 percent. Further steps are necessary, Liebig told the newspaper. Up to 400 people could lose their jobs in the next few months. Workers as well as salaried staff will be affected. European Plastics News was unable to speak to company officials before deadline.
Engel is far from alone in facing a downturn in its business; short-time working and job cuts have been implemented across the European injection machinery sector. Arburg GmbH + Co. KG, Ferromatik Milacron Maschinenbau GmbH and Netstal AG have all said they are operating on reduced hours. KraussMaffei AG cut staffing 10 percent at the end of last year and Husky Injection Molding Systems Ltd. cut machine production at its plant in Luxembourg last summer.
According to EPN sources, internal data from European machinery association Euromap shows the value of the European injection machinery market declined from 400 million euros ($541.5 million) in the first quarter of 2008 to 140 million euros ($189.5 million) in the first quarter of this year.
Engel is the world's biggest injection press maker, but its strong position in the automotive sector and especially in large machines may leave it more exposed than small competitors. The Kurier report said the company's plant at Sankt Valentin where it builds larger-tonnage machines is likely to carry the brunt of cuts.
Engel CEO Peter Neumann said in March he expected performance for the fiscal year ended in March to be on par with its 2008 result of around 620 million euros ($839.3 million). He predicted a 25 percent decline for the current financial year.
The firm has responded to the global recession by introducing cost-saving designs, including its Duo Pico and Victory Spex lines. It has also taken a leaf out of the automotive industry book by offering customers worldwide a 3,010 euro ($4,070) discount on a new machine when they scrap an old one or for European customers sell it to a dealer.