Engel plans 400 job cuts as machine market dives

Engel issued a statement to the Austrian press at the end of April in which it said it was discussing a package of measures affecting up to 20% of its workforce with the states of Upper and Lower Austria, although this did not refer specifically to job losses.

Austrian newspaper Kurier reported Wednesday this week that plans are in hand to extend the existing short time working arrangement covering 1,800 of Engel’s 2,200 Austrian employees, which was due to expire in June, on to September.

However, the Kurier report quotes Engel marketing director Gerd Liebig saying that this will not be sufficient to enable the company to deal with the approximate 60% decline in orders it is facing.

PRW.com has been unable to speak to officials at the company. However, the Kurier quotes Liebig saying: “Further steps are necessary. On one hand there are discussions with the works council and union about extension of short time working up to the end of September. On the other hand, redundancies are not to be avoided. Up to 400 people could lose their jobs in the next few months, workers as well as salaried staff will be affected.”

Engel is far from alone in facing a downturn in its business; short time working and job cuts have been implemented across the European injection machinery sector. Arburg, Ferromatik Milacron and Netstal have all said they are operating on reduced hours; Krauss-Maffei cut staffing by 10% at the end of last year; Husky cut machine production at its plant in Luxembourg last summer.

PRW.com understands that internal data from the European machinery association Euromap shows the value of the European injection machinery market declined from €400m in the first quarter of 2008 to €140m in the first quarter of this year.

Engel is the world’s biggest injection machine maker but its strong position in the automotive sector and especially in large machines may leave it more exposed than some of its smaller competitors; the Kurier report says the company’s plant at Sankt Valentin – where it builds larger tonnage machines – is likely to carry the brunt of cuts.

Engel Group CEO Dr Peter Neumann told PRW's sister publication European Plastics News at the Plast fair in Milan as recently as March that he expected its performance for the year to March 2009 to be on par with its 2008 result of around €620m. He predicted a 25% decline for this financial year.

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