5 November 1998: British glassmaker and building products group Pilkington Plc has widened its already extensive cost cutting programme, adding a further UK 50 million (US$ 83.6 million) of planned an…
5 November 1998: British glassmaker and building products group Pilkington Plc has widened its already extensive cost cutting programme, adding a further UK 50 million (US$ 83.6 million) of planned annual cost savings to the 200 million set to be achieved by the end of the current year. The group reported pretax profit for the six months to 30 September toward the top end of analysts“ forecasts at UK 66 million. “Many of the markets in which we operate are experiencing increasing economic uncertainty, volatility and deteriorating trading conditions. Despite these external factors, and due to the substantial benefits we are achieving from our restructuring programmes, we will report progress in this current year,” said group chairman Sir Nigel Rudd. Chief executive Paolo Scaroni said the extended cost cutting programme will cut at least a further 1,500 jobs by the year 2000, on top of the 7,500 that are to go in the existing plan, and bringing the global workforce down to less than 30,000. About 100 of these new job cuts will be in the UK. One in four of the motor vehicles produced around the world have Pilkington glass in them, and the company has about 20% of the developed world“s building glass market. The company competes with Asahi Glass Co Ltd of Japan, which has a similar industry position, for the global number one spot. It has shed much of its downstream operations in the two-year cost cutting effort, reducing the number of Pilkington plants worldwide to 112 from 180. But its shares are worth barely more than a quarter of their value two years ago, with analysts concerned that it does not have the balance sheet or cash flow strength to sustain market leadership. An earlier strike by General Motors workers in the US cost Pilkington UK 7.0 million (US$ 11.75 million). Meanwhile, the company downplayed fears that its announcement of the job losses in its worldwide operations might threaten job losses at its Doncaster factory in the UK, which employs 500. “The likelihood is that most of the reduction will be in our workforces in continental Europe and in North and South America. Very few redundancies are envisaged in the UK,” a company spokesman was quoted as saying. He added that as the target date to finalise the latest round of cuts was March 2000, the details would be worked out carefully between now and then.