Group Announces Restructuring Initiatives; North American Float
Lines to Undergo "Crushing"
The board of the NSG Group announced yesterday a series of measures
to try and address the current economic downturn and improve profitability
going forward. The overall objective is to protect the business
in the short term and also to re-establish profit growth from fiscal
year 2011 onwards.
While NSG had already implemented production adjustments, lowered
operational expenses and headcount reductions, yesterday's announcement
stated "it is clear, however, that more radical measures are
now required. Consequently, the NSG Group is taking further action
to realign its global manufacturing sites, to reduce capacity and
to reduce headcount further."
The total investment in the approved restructuring will be $244.9
million USD (22 billion yen). The statement noted that the measures
are designed to help ensure that NSG emerges from the current slump
in world trade "strengthened and realigned to address future
challenges and opportunities."
As part of its restructuring, NSG is taking steps to reduce capacity
and output to match the requirements of its customers. Automotive
production capacity will be reduced in Europe and North America,
and a number of other initiatives designed to align the group's
production capacity to demand also will be implemented in South
America, Japan and Asia.
NSG also will reduce its float glass capacity. This will involve
removing capacity equivalent to two float lines in Europe and a
15 percent reduction of float capacity elsewhere.
On the company's building products side, Roberta Steedman, communications
manager for Pilkington North America Inc., told USGNN.com
that, to reflect lower demand, its float capacity in North America
will be reduced by crushing excess glass into cullet, which later
can be recycled as an addition to the raw batch materials.
"After an extended crush period (approximately five weeks),
our Lathrop, Calif., float plant will introduce weekend crushing
from February 2009. The Laurinburg, N.C., float will begin crushing
on one of its lines for two days a week over the next 15 weeks,
while the line in Ottawa, Ill., will continue to operate at full
While the company's seasonal and temporary workforce already has
been reduced, the company now is "realigning its manufacturing
sites and streamlining its central functions" to implement
As a result, the NSG Group will have reduced its overall headcount
by approximately 5,800 people by March 2010. This represents around
15 percent of the total global headcount. Around 3,000 of these
employees will have left the group by the end of the current financial
"We have employees on layoff at the plants due to the shutdowns/crush
periods, but no plant closures are planned at this time in North
America," Steedman says. "We will be looking to rationalize
staffing requirements at all levels of our business, including streamlining
HERE to read the full announcement.
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