Facing a 50 percent plunge in orders during the past 12 months, leaders of Ferromatik Milacron Maschinenbau GmbH are negotiating with union workers for more cost cuts.
The injection molding machinery maker said Dec. 2 that cost cuts already in place since January scalebacks to workers' hours and reduced overhead and materials costs were not enough. The board of directors spoke with workers at the factory in Malterdingen, Germany, about the ongoing impact of the international economic crisis.
Details of the new cost-cutting moves have not been determined yet, although officials said options include shorter shifts companywide, transitional support for workers that would include compensation and retraining, and permanent job cuts.
Ferromatik Milacron currently employs 414, including 17 apprentices, at its factory in Malterdingen. The workers are represented by Germany's IG Metall union.
During the past 12 months, new orders at Ferromatik Milacron have plunged by about 50 percent, officials said. Although the press maker has been able to maintain its market share, profit margins have fallen.
We've done a lot already, but it is still not enough to bring the company safely through the current crisis and position us for the future, said Guy Moilliet, managing director of Ferromatik Milacron, in a news release.
Moilliet also is managing director of machinery technologies for Europe for Ferromatik's parent, Milacron LLC of Batavia, Ohio.
We are now beginning negotiations with our labor representatives and the union in order to find the best solution for everyone, given the difficult circumstances we're facing, he said.
Thomas Flamm, chief labor representative at Ferromatik Milacron, said: Our goal is to find the fairest and most socially responsible solutions.
Under the short-work schedules that Ferromatik Milacron implemented in January, the German government picks up part of the difference in pay. If shorter work shifts are enacted under the cost reductions, those would fall under the government program, said a company spokeswoman.
This year, Milacron LLC spent nearly six months under Chapter 11 bankruptcy, before emerging in August. Milacron is a new, privately held company owned by a group of financial investors led by Avenue Capital Group and DDJ Capital Management LLC.
But in an e-mailed response to a question, Moilliet said the cost-cutting moves are not being dictated by Milacron or its new owners. This decision does not come from Milacron LLC. Every group within Milacron is challenged to make profit and they can decide how to do so, he said.
Meanwhile, Ferromatik Milacron leaders anticipate a modest increase in new orders in 2010. A new product line is expected to drive strong sales in 2011.
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