NSG 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 load."

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 group-wide restructuring.

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 year.

"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 central functions."

CLICK HERE to read the full announcement.

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