In February Engel (Schwertberg / Austria; www.engelglobal.com) announced that it would be introducing short-time working and a system of rolling temporary layoffs for a three-month period starting in April – see Plasteurope.com of 24.02.2009. However, this is evidently not sufficient to keep the machinery maker afloat. On 29 April 2009 it therefore announced that a further capacity reduction of around 20% was unavoidable. The cuts affect its three Austrian facilities in Schwertberg, Dietach and St. Valentin, which have a combined workforce of 1,900.

The company is putting together a package of measures for the next 15-18 months, including the establishment of a foundation and support for training and skills enhancement. A company spokesman explained that talks now have to be held with representatives of the regional government, the Austrian employment agency and the workforce on this model, which is specifically tailored to Engel’s needs. Although no details were given, the solution seems similar to the German model of setting up a lifeboat company to provide a mixture of continued employment and training for workers’ whose jobs are cut. It looks as though the cost will be shared by regional government, the Austrian employment agency and the company. Engel would then presumably be able to re-employ staff quickly when the economy picks up.

The company does not expect the market for injection moulding machines to recover in the medium term. It estimates that the European market for new machines will halve in 2009 and predicts a decline of 70% year-on-year in the first six months.