Pilkington sacks 1,900 workers
In the City, profit forecasts were shaved as the chief executive, Roger Leverton, also warned that expectations for the year to March were too optimistic. The shares closed 8p down at 198.5p.
Although flagged by the company at the time of its recent acquisition of the Italian glass- maker SIV, the size of restructuring surprised some investors, coming as it did only months after the company tapped the market for pounds 300m in a rights issue. About pounds 70m of the total cost is to cover redundancies, with a further pounds 85m to write down the book value of factories slated for closure.
In both Europe and the US, products are being shifted between sites to lengthen production runs and reduce unit manufacturing costs. In addition, Pilkington's German double-glazing capacity is being cut to reflect falling demand.
There was an angry response from union leaders, who said yesterday they would be seeking immediate consultation with Pilkington's management. Alan Black, a GMB official, said: "I had hoped that the days of hearing about redundancies through the media had long gone."
Mr Leverton, the former RTZ executive who broke a long line of Pilkington family appointments when he joined as chief executive, responded that he was obliged to release price- sensitive information to the market in this way.
He played down the impact of the proposed job losses on British workers, pointing out that only 14 per cent of Pilkington's business was located in the UK. More than a third is in Germany, which is expected to bear the brunt of job losses, and a quarter in the US.
The profits warning, which prompted downgrades of forecasts from about pounds 218m to pounds 210m for the year to March, reflected comments from Mr Leverton that the General Motors strike had hit US profits by up to pounds 10m.
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