Deputy City Editor
BICC, the cables to contracting group, confirmed the pressures squeezing the construction industry by taking the axe to its low-voltage cables business, shedding up to 900 jobs at a cost of pounds 80m. The group also said it was in negotiations that might lead to the sale of its housebuilding operation and warned that difficult trading conditions would lead to lower- than-expected full-year pre-tax profits.
Alan Jones, chief executive, said the majority of the job losses were likely to be made in its KWO cables plant in Germany, but there wouldl also be cuts in the UK and North America. BICC has already cut 400 German jobs and the latest round of cuts will bring its workforce there to under 1,000.
Germany has suffered heavily from the difficult trading conditions afflicting the constuction and cables market across Europe. BICC will make an pounds 80m charge to cover the cost of the cables rationalisation, of which about half will cover redundancy and plant closure costs.
The decision to reduce capacity follows a decision to move the group's activities towards higher value-added operations such as electronic speciality and optical cables. Low-voltage cables have generated a low return on capital, squeezed by rising copper prices and intense competition.
BICC had already flagged its intention to withdraw from the house-building market, one of a growing number of companies that has decided this year against continuing the struggle with the moribund homes market. It confirmed yesterday that any sale would result in a goodwill write-off of up to pounds 44m.