BOC ready to axe 1,000 jobs
Monday 10 August 1998
Analysts are expecting Danny Rosenkranz, chief executive for the last 18 months, to announce an acceleration of the company's restructuring programme started in May. Mr Rosenkranz is looking for cost savings of around pounds 100m a year. Analysts expect him to announce a restructuring charge of well over pounds 100m tomorrow.
In particular, the sharp slowdown in the semiconductor industry worldwide has hit BOC's vacuum technology division, BOC Edwards, one of the group's success stories. Edwards, based in Shoreham-by-Sea and Crawley, makes systems which supply the ultra-clean air required for semiconductor factories.
City sources are questioning whether Mr Rosenkranz, who has been with the group for 22 years, will have the stomach to cut back BOC Edwards, a division he has done much to build up himself.
Siemens' recent decision to scrap its giant semiconductor plant in North Tyneside is just one example of how the Asian downturn has hit the industry, which has enjoyed a roller-coaster ride of explosive expansion followed by cyclical contraction.
BOC refused to comment on City speculation yesterday, but it is understood that the company may be planning even more than 1,000 job cuts in the UK, and up to 4,500 around the world. Factory closures are also possible.
Under Mr Rosenkranz's drive to refocus the group, it sold the badly performing healthcare subsidiary Ohmeda for pounds 640m this spring. The company said it would like to spend the money on a European acquisition, but has not found a suitable target yet, and may hand the cash back to shareholders via a buy-back.
The company's distribution side, which services Marks & Spencer, is also a possible candidate for sale, but there are no immediate plans to offload it.
Mr Rosenkranz is insisting on the need for a clearer strategy at BOC, and over the last 18 months has reversed the decentralisation of the management structure. In gases, for instance, which accounts for four- fifths of the group's business, he has created a 14-person management board, which includes all the regional gases directors.
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