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Electronics Production | May 29, 2009

Elma accelerates production transfer

Elma is accelerating the implementation of its transformation process. In order to reduce the costs on a sustained basis, additional process steps at the Wetzikon location will be handed over to strategic partners or relocated to the Elma plant in Romania.
This will affect approximately 80 staff in Switzerland. This number includes 16 positions which were already announced in April 2009. There is a redundancy programme for staff and the consultation procedure with the social partners has been initiated. At the same time, automation in Switzerland is being accelerated and the customer-related areas such as Research & Development as well as Engineering and Sales are being strengthened.

Elma has been severely affected by the economic downturn particularly at the Wetzikon location. Whereas turnover in local currency could be increased in the USA and Israel in the initial months of 2009 despite the worldwide recession, the situation in other regional companies, particularly in Switzerland, has deteriorated further. This development makes the accelerated implementation of the transformation process introduced in 2007, and thus the planned relocation of production processes to strategic partners or the Elma plant in Romania, unavoidable.

As a result of the planned measures to transfer various parts of the work in the pre-fabrication stage of the Enclosures & Components product line, a further 20 staff are now affected at the Wetzikon location. A signed redundancy programme already exists which will again be applied. Elma has set itself the target of largely completing the transformation process by the end of 2009. With these measures, about half of the approximately 80 affected workplaces, comprising labour-intensive production processes, have been relocated. Elma will implement any further required measures in compliance with employment rights and in the most socially responsible way.

In future, the Wetzikon location of Elma Switzerland will concentrate on technically demanding and complex production processes as well as on the production of prototypes. In addition, the automation of rotary switches production and of micro-series will be accelerated. At the same time customer-related areas of Research & Development as well as Engineering and Sales will continue to be strengthened.

Outlook
Visibility in the markets continues to be limited to a few weeks. Elma has set itself the target of achieving a balanced operating result (EBITDA) in the 2009 financial year through the accelerated implementation of its corporate strategy and rigorous cost management.

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