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Electronics Production | March 05, 2007

Perlos ends production in Finland lays of 1132

EMS provider Perlos has said in a statement today that the company will end manufacturing operations in Finland and lay off 1,132 people in the country.
The profitability improvement programme initiated by Perlos in January has reached a significant milestone today with the conclusion of the co-determination negotiations started on 22 January 2007 concerning all personnel in Finland. In the negotiations, Perlos has sought various options for improving the profitability of its Finnish operations in the current over-capacity situation. The negotiations have concerned 1,400 persons.

Following the completion of the negotiations, Perlos has reached the conclusion that there are no possibilities to continue production operations in Finland. The company will discontinue all production operations in Finland, closing its two facilities in North Karelia by the autumn of 2007 at the latest. In line with the earlier announcement, the company will also cut overlapping functions in the organisation, which will lead to personnel reductions in other functions in Finland as well.

As a result of the aforementioned measures, the company will need to lay off a total of 1, 132 persons in Finland, of whom 1,052 are working in production functions and 80 in corporate services. Of the total, 828 are workers, 226 salaried employees and 80 senior-level salaried employees. Majority of the personnel reductions will be made in the North Karelia area. It is estimated that the personnel reductions will be carried out by September 2007. The effects on personnel are presented in more detail in appendix 1.

The following operations will remain in Finland: a head office in Vantaa, as well as technology services and various support services in Turku, Vantaa, Ylöjärvi and Joensuu. The total number of personnel remaining in Finland will be 200 people.

As a result of the discontinuation of production operations in Finland, Perlos expects to incur non-recurring expenses of about EUR 35-40 million, for which a provision will be booked in the first-quarter result. The bulk of the expenses will come from write-downs of property, plant and equipment, which will have no effect on cash flows, and severance compensation for personnel faced with redundancy.

In addition to its statutory obligations, Perlos has decided to spend more than 6,000,000 euros on various support measures for personnel who will be laid off. The support package is intended to help personnel find new jobs, undertake new training courses and move to other municipalities. The package includes, among other things, an extra severance payment, support for training, pension solutions and various services to facilitate re-employment.

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