Tuesday, 13 December 2011 22:00

Vacon Plc to start negotiations to save costs

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Vacon is starting negotiations with its white-collar personnel working in the Vacon Group's parent company Vacon Plc in Finland as part of a large global cost-savings plan in the Group. During the years 2012-2013, the Group aims to achieve annual savings equal to 60 man-years in its parent company and 10 man-years in the Vacon subsidiaries. The invitation to the negotiations in the parent company was given to Vacon's white-collar employee representatives yesterday, 12 December 2011.

The negotiations affect approximately 420 white-collar employees in the Vacon Group's parent company in Finland. The negotiations will deal with and aim to agree on measures which can be used to adjust business operations to the market situation. The goal is to find the cost-saving measures which ensure the company's competitiveness as well as developing and launching new products to the market. In addition to improving efficiency in operations, among the measures to be initially considered are reductions in definite-duration office personnel, voluntary leave of absence, working part-time, exchanging holiday pay for time off, outsourcings, temporary lay-offs and personnel reductions. At the same time, Vacon will consider the re-organization of its global operations.

The need for personnel reduction is estimated at 60 persons at most. Any temporary lay-offs and part-time work are estimated to affect not more than approximately 400 white-collar employees of the company.

In the background of the need for the alignment are economic and production related reasons as well as the possible re-organization of Vacon's operations. The need for the alignment is caused by the declined order intake and the poor predictability of market prospects in the future. Vacon's financial position has deteriorated in the second half of 2011 and the company reduced its guidance for the year 2011 on 12 December 2011. The demand for Vacon's wind power products started to decline already in June 2011, and it has not shown any sign of recovery. Additionally, during the fourth quarter of the year, the demand for motor control products has also weakened.

"The reason for the weakened demand is in the prolongation and escalation of the European finance crisis. At the moment, it is particularly difficult to estimate how the markets will develop. Therefore, we will have to act now and ensure that we will survive with our feet dry if the crisis still deepens and drags on. This is the only way we can make sure that we are prepared when the market picks up," concludes Vesa Laisi, Vacon's President and CEO.

In Finland, Vacon employs altogether some 750 people in Vaasa, Tampere and Vantaa. The company will inform of the results of the negotiations after they are completed.

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