KBA Reduces Its Payroll to Compensate for Shrinking Global Market Volume for Web Offset Presses

WÜRZBURG, GERMANY—September 25, 2014—Following constructive negotiations the Koenig & Bauer (KBA) management board, managing directors of the subsidiaries Albert-Frankenthal and KBA-FT Engineering, PfalzMetall, employee representatives at the Frankenthal site and IG Metall agreed on necessary market-related capacity adjustments at the KBA plant in the German state of Rhineland-Palatinate. The corresponding agreements were signed on Wednesday.

The agreement stipulates that given the significantly shrunken global market volume for web offset presses and the resulting insufficient capacity utilization at the companies in Frankenthal which are highly dependent on this segment, the number of employees at both subsidiaries will be reduced to a total of 164 (84 at Albert-Frankenthal and 80 at KBA-FT Engineering). Capacity utilization is expected to be improved due to these personnel adjustments and the prolonged losses posted by the two subsidiaries should soon come to an end.

Currently 222 employees are on the payroll at Albert-Frankenthal and 149 at KBA-FT Engineering, 28 of which will leave due to natural fluctuations. Accordingly the current agreement effects some 180 staff. They are to be made redundant by October 31, 2014, and will have the opportunity to qualify for a new position for one year at a transitional company from January 1, 2015. Severance pay for the employees leaving is based on the collective wage agreement signed in 2011 and in the future social compensation plans agreed for the plant in Würzburg will be valid. A new amendment to wage agreements and framework agreements will regulate the assignment of orders in future between the Group and the two companies in Frankenthal.

The Koenig & Bauer management board regrets the loss of jobs and refers to the intensive efforts to generate additional orders by the Group and other sectors for the Frankenthal facility. However, as this volume was not sufficient and extensive capacity adjustments were also necessary at other KBA plants there was no other option but to sustainably improve the completely inadequate capacity utilization in order for the business to operate cost efficiently. The business model developed by the management board together with the managing directors on site for both subsidiaries with a total of 164 staff will make the continuation of the KBA site in Frankenthal far more promising than ongoing underemployment with high losses.

Source: KBA.