Wärtsilä to move part of production to China

19 Jan 2010

The Wärtsilä propeller factory at Drunen - scheduled to close under the company's restructuring plans

Wartsila is rationalising production facilities in Europe and moving them to China.

To adjust to the fundamental changes in the market, Wärtsilä plans to reduce its manufacturing capacity. The company also plans to move the majority of its propeller production and auxiliary engine production to China, close to the main marine markets.

The current propeller manufacturing in Drunen, and the component manufacturing DTS in Zwolle, both in The Netherlands, are planned to be closed. The Wärtsilä 20 generating set production in Vaasa Finland is also planned to be closed and moved to China in order to stay competitive in this market.

In the course of 2010 Wärtsilä plans to reduce approximately 1,400 jobs globally within the Group. Of these reductions 570 are planned to be in the Netherlands. The remaining reduction will impact various divisions, functions and countries and will be clarified during the first half of this year. Currently Wärtsilä employs 1,561 people in the Netherlands.

"The world has dramatically changed in a short period of time. China has become a strong maritime centre and its growth will continue. The low activity in the global marine market continued throughout 2009. Wärtsilä Ship Power order intake was significantly lower than during previous years and competition in the market will intensify. By developing our manufacturing footprint and our businesses for the future key markets Wärtsilä will further improve its competitiveness and service to our customers in the tightening markets. It is our responsibility to ensure Wärtsilä's leading position now and in the future," says Ole Johansson, president & ceo.

The non-recurring costs related to the restructuring will be approximately EUR 140 million. This includes non-cash write offs of approximately EUR 50 million of which EUR 40 million is recognized in 2009. Wärtsilä is looking for cost savings of approximately EUR 80-90 million. The effect of the savings will start to materialise gradually during 2010, and will take full effect in the first half of 2011.

The formal consultation processes will be initiated in the affected countries according to local practices and legislation and the company will provide support and consultation as well as assistance in re-employment in the impacted countries. Already in 2009 Wärtsilä utilised its flexible operating model to adjust the capacity to the new market demand and initiated and largely implemented actions to reduce approximately 600 jobs. Wärtsilä's personnel totalled 18,541 at the end of 2009.

Wärtsilä will continue the manufacturing of large 4-stroke engines in Europe; in Vaasa, Finland and Trieste, Italy. The R&D activities in Europe will be maintained in the current locations. In the Netherlands Wärtsilä will establish a Propulsion Technology & Services Centre.

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