Trafalgar House sheds 450 jobs at Davy

JOHN SHEPHERD

Trafalgar House, the financially troubled conglomerate, is making 450 staff redundant at Davy International, the ill-fated engineering business bought in 1991. Most of the job losses are at Davy's site at Poole, Dorset, which is losing money and will be closed.

Davy has 1,250 staff employed at Poole and two other sites in Stockton in the North-east and Sheffield, Yorkshire. Sixty staff are being sacked at Stockton and 75 at Sheffield. There are plans to re-locate up to 200 of the 430 staff at Poole, although the company expects only slightly more than 100 to take up the offer.

The redundancies form part of plans by Trafalgar, which also owns the Cunard shipping line and has interests in construction, to tackle the cost base head-on. The financial cost and eventual savings of the restructuring at Davy, however, will not be disclosed until Trafalgar's group annual results are released next month. Investors saw little in yesterday's announcement to change their negative views on Trafalgar, which is 26 per cent-owned by Hongkong Land. The depressed share price eased 0.25p to 23.5p.

Michael Foster, chief executive of Davy, said: "It was essential to take action to secure the future of the business."

He added that in recent years Davy's cost base and operating structure had become inappropriate to the "highly competitive environment in which it operated".

All the redundancies at Poole are full-time employees. The site principally undertakes design work for aluminium and steel rolling mills. Current work will be transferred to Stockton.

A spokesman said that competitive tendering world-wide for design work had become intense, particularly from German companies "who have been more successful than us". Davy had not won enough work "to cover costs."