KEY PLASTICS
French-Slovakian unit in administration / Massive job cuts / "Facilities far oversized,” auto supplier says
The French-Slovakian division of automotive supplier Key Plastics (Farmington Hills, Michigan / USA; www.keyplastics.com) filed a petition for redressement judiciare, the French form of US Chapter 11 insolvency proceedings, in mid-November 2008. The filing came only a day after the management team headed by president and director general Thierry Blampain announced dramatic job cuts in the workforce of Key Plastics France (Bellême / France), mandated by the US parent company.
Altogether, the divisional workforce will be reduced from 880 to 580. The affected French sites are at Bellême, Voujeaucourt and Rochefort. Voujeaucourt, where 114 people are currently employed, is to be closed altogether, while 130 of the 197 jobs at Rochefort will be axed. At the main site of Bellême, only 30 of the 200 jobs will be lost, and the injection moulding production team will remain intact. In Slovakia 17 of the 328 jobs are to go.
"Demand has dropped significantly," said Ralph Ralston, president of North American operations, explaining the reasons for the move. "Our facilities are considerably oversized,” Blampain acknowledged. For the three French plants alone, the loss has trebled within the space of just one year. Sales, too, have slipped dramatically. According to French media reports, Key Plastics France expects turnover of EUR 55.8m in 2008, down 17% on 2007.
Key Plastics France – a sister to the Germany & Czech Republic division of Key Plastics Europe – primarily supplies French OEMs Renault and PSA, which have reduced production by 30% since 2003. Group companies in the rest of Europe and Asia apparently will not be affected by the latest developments. The commercial court in Alençon has placed the France-based unit in external administration. The period of observation within which an acceptable restructuring program must at least be partially implemented was set at six months.
The job cuts and the insolvency are seen as being directly related to the financial problems at the US parent company. On the same day as the French unit declared its insolvency, the US holding announced it was converting long-term debt obligations of USD 115m into common stock in a debt-to-equity process. For now, the group says its European activities are unaffected by the restructuring of these Senior Notes, and none of the foreign subsidiaries will be included in the US debt restructuring, which is expected to be completed by January 2009.
Altogether, the divisional workforce will be reduced from 880 to 580. The affected French sites are at Bellême, Voujeaucourt and Rochefort. Voujeaucourt, where 114 people are currently employed, is to be closed altogether, while 130 of the 197 jobs at Rochefort will be axed. At the main site of Bellême, only 30 of the 200 jobs will be lost, and the injection moulding production team will remain intact. In Slovakia 17 of the 328 jobs are to go.
"Demand has dropped significantly," said Ralph Ralston, president of North American operations, explaining the reasons for the move. "Our facilities are considerably oversized,” Blampain acknowledged. For the three French plants alone, the loss has trebled within the space of just one year. Sales, too, have slipped dramatically. According to French media reports, Key Plastics France expects turnover of EUR 55.8m in 2008, down 17% on 2007.
Key Plastics France – a sister to the Germany & Czech Republic division of Key Plastics Europe – primarily supplies French OEMs Renault and PSA, which have reduced production by 30% since 2003. Group companies in the rest of Europe and Asia apparently will not be affected by the latest developments. The commercial court in Alençon has placed the France-based unit in external administration. The period of observation within which an acceptable restructuring program must at least be partially implemented was set at six months.
The job cuts and the insolvency are seen as being directly related to the financial problems at the US parent company. On the same day as the French unit declared its insolvency, the US holding announced it was converting long-term debt obligations of USD 115m into common stock in a debt-to-equity process. For now, the group says its European activities are unaffected by the restructuring of these Senior Notes, and none of the foreign subsidiaries will be included in the US debt restructuring, which is expected to be completed by January 2009.
01.12.2008 Plasteurope.com [212308]
Published on 01.12.2008
German version of this article...