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The leading Finnish paper company Metso, which has 66 employees in Oulu, is to begin negotiations on making up to 1200 employees redundant.
'The possible reduction in the number of units and the consolidation of operations into bigger units will be examined as part of the negotiations,' according to the company.
The redundancies are a response to customers buying less of the paper-making equipment which the company manufactures. 'The situation has been further weakened due to the global economic crisis' adds Metso.
The personnel negotiations will start in the Paper business line and in the Automation business line's Process Automation Systems unit. They will affect all personnel groups at all locations of these businesses in Finland.
"It is very unfortunate that we have to start measures of this magnitude in Finland. However, we want to ensure the competitiveness of the solutions we offer to the pulp and paper industry also in the future; our intention is to remain the market and technology leader. It is our understanding that the new machine market will not return to the level of the recent years, so we will adjust our cost structure," says Metso's President and CEO Jorma Eloranta. "Through the negotiations being initiated, we will seek solutions to this situation together with the personnel."
In the paper business line, the reduction need is estimated to be a total of 800-1,100 people. This will affect not only the Service Centre in Oulu but the Roll Finishing Systems unit in Hollola, the Technology center in Inkeroinen, the Jyväskylä units, the Järvenpää units, the Tampere roll factory, the Paper business line's Turku units, the Valkeakoski units and the Varkaus Service center. These units employ approximately 3,800 people.
'Last autumn, personnel negotiations regarding temporary lay-offs were held in the Paper business line's units in Finland. The measures have already been initiated to some extent, but unfortunately they are not enough in the prevailing market situation,' claimed the company.
'In the personnel negotiations, the possible reduction in the number of units and the consolidation of the operations into bigger units will be examined. At the same time, also the division of responsibilities between units in Finland and China will be defined.'
The personnel negotiations will start immediately and the aim is to conclude them by mid-March. The redundancies (termed 'employee reductions' by the company) are expected to take place during April - September of this year.
As a result of the arrangements, the annual expenses of the businesses in question are estimated to decrease by 40-50 million euros. The cost reductions are estimated to be realized in full starting in 2010. The non-recurring expenses caused by the arrangements and recorded in 2009 are estimated to be EUR 10-20 million. "The need, nature and scope of potential support packages will be clarified during the negotiations process. Therefore their cost effect cannot yet be estimated in detail."
The pulp and paper industry's new investments in the upcoming years are estimated to decrease by about one third, and most likely even more this year, compared to 2004-2008, and they will be more clearly focused on Asia and South America.
The closures of customer mills in the Nordic countries and elsewhere in Europe and North America and the decreasing markets for new machines globally have reduced the demand for Metso's paper technology and process automation products.
"Because of the development described above, we will adjust the existing new paper and board machine production capacity in northern Europe and our cost structure to correspond to the permanently decreased demand. At the same time, we will direct our know-how globally to the services business," emphasizes Bertel Langenskiöld, President of Metso's Paper and Fiber Technology segment.
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