Philips plans to slash costs by closing up to 80 factories
Tuesday 03 November 1998
Philips spokesman Ben Geerts said the company had already announced in March that it would examine its industrial infrastructure.
At that time, "we had 269 factories and we will have reduced this to 266 by the end of 1998," Mr Geerts said.
"We said at the beginning of the year that we wanted to address our manufacturing infrastructure and reduce the number of our sites."
The company, Europe's largest consumer electronics group, "built too big a production capacity for requirements," Philips President Cor Boonstra was quoted as saying in yesterday's editions of the Financial Times.
It was not immediately clear whether employees at the targeted factories would be laid off or reassigned.
The Dutch group wants to cut the number of production sites to between 160 and 170 from the current 244 by 2002, the newspaper reported.
Mr Geerts said the company didn't have a specific plan on how to scale back the number, but that it would be done mainly through streamlining operations and combining some production lines.
Monday's news boosted Philips' shares on the Amsterdam stock exchange, which jumped 9.1 per cent to close at Fl108.40 (pounds 36).
Analysts said the company was simply continuing a restructuring process it started two years ago.
Jan Coen Balt of Effectenbank Stroeve in Amsterdam said that Philips was focusing more on distribution and marketing than manufacturing, hoping that by cutting costs it will be able to react faster to market demand.
The cuts come amid a rough season for Philips.
The company said last month that third-quarter income from normal operations fell 38 per cent to Fl449m (pounds 149m). Philips also plans to end its telecommunications joint venture with US-based Lucent Technologies.
The news followed a profit warning in September that income from normal operations in 1998 should be unchanged from 1997.
Mr Boonstra said Philips is still open to purchases in areas such as medical products, semiconductors and lighting.
"Now we can take our pick where we acquire and grow," he said, adding that the company wants to expand, mainly in the United States.
- 1 Isis propaganda video shows 25 Syrian soldiers executed by teenage militants in Palmyra
- 2 Number of young homeless people in Britain is 'more than three times the official figures'
- 3 The map showing the most dangerous tourist destinations in Europe, according to the Foreign Office
- 4 Right to die: Belgian doctors rule depressed 24-year-old woman has right to end her life
- 5 The biggest first date turnoff has been revealed
Isis propaganda video shows 25 Syrian soldiers executed by teenage militants in Palmyra
Number of young homeless people in Britain is 'more than three times the official figures'
Van driver who comforted Clark Carlisle and called 999 after suicide attempt dies age 24
Greece debt crisis explainer: A history of just how the country landed itself in such a mess
Greece debt crisis referendum: Greeks want to vote No to austerity – but Yes to Europe
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
More Britons believe that multiculturalism makes the country worse - not better, says poll
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
'I wish the BBC would stop calling it Islamic State' – David Cameron unleashes frustration at broadcaster
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
iJobs Money & Business
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...
£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...
£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....
£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...