1'000 layoffs for PKC's North American operations

It is estimated that North American truck production volumes continue to decrease and to be on a lower level for the medium term. The production decline is focusing on heavy-duty trucks, while the production of medium duty trucks is estimated to continue on the current level. Low fuel prices and interest rates have not accelerated truck sales as expected in the USA. Stagnant freight demand, increased supply of competitively priced second hand trucks and reduced need to replace fleets have decreased new truck sales. In addition, sales channel inventory levels are significantly above the historic ten year average. Therefore, the production volumes have also started to decrease. According to LMC estimates, taking into account economic outlook for the coming years, truck production volumes will stay on a lower level for the medium term. PKC has decided to reduce production capacity and to cut fixed cost in its North American operations. The personnel reductions will be maximum 1'000 persons and they will be implemented fully by the end of the year 2016. Currently PKC employs about 11'400 persons in North America. The related non-recurring items will amount EUR 4.5 million and the estimated annual cost reduction is EUR 9 million for 2017 onwards.