At its annual general meeting held on 24 July, the UK glassmaker Pilkington Plc, under pressure as a result of the weakness of its European markets, announced further details on how it plans to improv…
At its annual general meeting held on 24 July, the UK glassmaker Pilkington Plc, under pressure as a result of the weakness of its European markets, announced further details on how it plans to improve group profitability through cost cuts and job losses. Pilkington said it aims to complete the integration of its automotive glazing businesses, reorganise its European building products activities and significantly reduce overhead costs. These programmes will lead to job losses and write-offs as a result of significant cost cuts. “It is too early to be precise in terms of numbers, but the pay back on these programmes is quick and we should be through the major cost impact before March 1998,” chairman Nigel Rudd told the company“s annual general meeting. Rudd also said the difficult European trading conditions seen in the second half of last year continued into the first quarter of the current financial year. While glass prices had increased from the low point seen at the end of March, they remain “relatively subdued”. In June, the company had announced an increase in the price of its glass for building products by 8% from 1 July. Pilkington said that as part of the rationalisation of its European automotive glazing business, it was closing its plant in Weisel, north-west Germany, one of its two main plants in that country. The closure would cut about 400 jobs as part of Pilkington“s plans to reduce its European workforce by 20%, over 1,000 people. The staff reduction plan also included over 300 job cuts in Britain (at the Triplex plant in St. Helens) and about 120 in Sweden, a spokesman said. Pilkington said it will review its European building products business where profits had been “totally inadequate”, and also aims to significantly reduce overhead costs, which it said totalled UK 1 billion (US$ 1.7 billion), or 30% of turnover. “Overall, 1997-98 will be a year of important transition,” said Rudd. “Trading results will continue to be affected by low price levels in Europe but actions we are taking will result in the group entering 1998-99 in much better shape”.