Heidelberg Reaches Pact with Employees on Reductions

HEIDELBERG, GERMANY—The management board and Workers' Council of Heidelberger Druckmaschinen AG (Heidelberg) have reached an agreement regarding the implementation of the "FOCUS 2012" efficiency program. The consensus reached provides for savings on personnel costs, more flexible working time arrangements, and worldwide job cuts that will reduce its current workforce of about 15,500 to fewer than 14,000 by mid-2014.

"The outcome of the negotiations will enable us to adjust capacities to meet demand and achieve the announced savings as planned. In consultation with the Workers' Council and the IG Metall union, we have devised a responsible concept for making the required cost and capacity reductions on a socially acceptable and sustainable basis through the global job cuts announced," Heideberg CEO Bernhard Schreier said.

The measures will help achieve the targeted annual savings of around US$240 million from fiscal year 2013-2014. Up to a third of these savings will be realized in fiscal year 2012-2013. The necessary one-off expenditure amounts to approximately US$200 million, most of which will be posted during the current fiscal year.

Most of the job cuts in Germany will be achieved by mid-2014 through voluntary redundancies, including options for older staff. This will ensure a balanced age structure at the company and prevent qualified staff from having to leave based on social criteria. Staff whose jobs disappear as a result of structural changes and adjustments to achieve greater flexibility will have the option of moving to a transfer and qualification company. The planned job cuts outside Germany are also under way.

Heidelberg feels that shortening the working week to 31.5 hours for all staff and reducing remuneration levels accordingly will put in place a long-term, collectively agreed arrangement that will lower personnel costs and immediately cut capacities at the German production sites by 15 percent. Taking the shorter working week as a basis, working-time accounts can be used to adapt individual working hours to the relevant capacity utilization. This will enable the company to make working times far more flexible and respond effectively to changing market requirements in the future, especially in the year that drupa takes place.

The company has introduced measures to adapt its global sales organization to the changed market conditions. The adjustment of activities in industrialized nations is being accompanied by an increased presence in emerging markets. To significantly reduce structural costs, sales activities have been pooled and specific markets restructured. Comprehensive support for the global customer base will still be ensured.