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Electronics Production | August 08, 2005

Finnish EMS Provider cut 230 jobs

Finnish electronics contract manufacturer , PKC Group will start co-determination negotiations with the personnel of the Kempele facility of the wiring harness business and the Raahe facility of the electronics business.

The negotiations to cut down personnel will be carried out due to production and financial reasons and the restructuring of operations. The estimated need for personnel cuts totals 230 at most: 170 at the Kempele plant and 60 at the Raahe plant. The co-determination negotiations concern all personnel groups and it is expected that they will be concluded by the end of September. The PKC Group started sourcing manufacturing services from lower-cost countries at the beginning of the 90s, when the company began purchasing subcontracted services from Estonia and Russia. According to the pro forma financial statements for 1994, the Group had net sales of EUR 23.4 million and 207 employees on average, all of whom worked in Finland. In 2002-2003, the PKC Group acquired its Estonian and Russian subcontractors to secure the investments necessitated by its growing business operations. In 2004, consolidated net sales amounted to EUR 177.7 million. On 30 June 2005, the Group had 3,547 employees, of whom 2,683 worked abroad and 864 in Finland. By making use of lower-cost countries in the provision of manufacturing services, the PKC Group has been able to grow pronouncedly, evolve and succeed; moreover, this has also enabled the development of the expertise of employees in Finland and a more than fourfold increase in their headcount. International competition is severe and thus, in order to safeguard the PKC Group's future, customers have been offered manufacturing services in which production takes place in lower-cost countries. For this reason, the PKC Group's production of wiring harnesses and electronics has grown at its foreign plants in recent years. In the same timeframe, demand for wiring harnesses and electronics produced in Finland has declined on account of poor competitiveness. Accordingly, the PKC Group will start downscaling operations in Finland to a level that matches demand. As previously reported, the Group's full-year net sales are expected to increase on the figure a year earlier. Owing to the declining price trend, relative profitability is forecast to recede towards the end of the year but to remain at a good level. The PKC Group offers design and contract manufacturing services for wiring harnesses, cabling and electronics for the commercial vehicle,telecommunications and electronics industry. The Group has production facilities in Finland, Estonia, Russia and Brazil, and it employs about 3,500 people. The Group had net sales in 2004 of EUR 178 million. PKC Group Oyj is listed on the Helsinki Stock Exchange.
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