Indesit the manufacturer of Hotpoint, Ariston and Indesit appliances have told unions of plans to layoff 1,425 people this week in Italy.
The FIM-CISL metal mechanics union said. Indesit told unions that 25 managers, 150 white collar staff and 1,250 factory workers across three Italian manufacturing plants will be let go due to production and financial woes triggered by falling sales.
Indesit faced unions on Tuesday also with the aim of smoothing the transition by coming up with adequate safety net solutions for redundant workers. Indesit plans to keep only high-end appliance manufacturing in Italy, and to concentrate low-cost appliance manufacturing in Poland and Turkey. We suspect that this is so as to compete with low cost Chinese and Turkish manufactured appliances that now almost dominate the lower end of the appliance marketplace.
The restructuring plan reportedly involves an investment of €70 million (£60 million).
At this point no UK redundancies have been reported.
The full press release from Indesit is as follows:
Such re-organization is the necessary response to the current competitive scenario in Europe, where the market is still below the volumes recorded in 2007 (Western Europe -10%, Italy -25%) and new producers from lower cost countries are continuing to expand thanks to their aggressive pricing and product policies, thus pushing down prices and margins and worsening what is by this stage a structural overcapacity of production.
In the last few years, and especially so in 2012 and 1st quarter 2013, the market situation has seriously affected Indesit’s Italian manufacturing, with a resulting recourse to the government’s redundancy fund (ordinary) for the factories (25% of days worked) and, since April 2013, the central offices as well (20% of days worked). The strategic mission of the Group’s three Italian industrial centres will be redesigned on the basis of a re- organization of production to be implemented over the period 2013-2016. The production facility in Fabriano (Ancona) will be the innovation driver for built-in ovens, while the Comunanza plant (Ascoli Piceno) will be the innovation driver for front-loading washing machines and the Caserta plant will concentrate on built-in fridges and gas hobs, mainly for thigh value added markets like Italy and other Western European countries. Fabriano, which becomes the Group’s only oven manufacturing centre, will also take over the production of the oven models currently made in Poland, while production operations no longer sustainable in Italy (mainly those exported to Eastern European countries) will be moved to countries with more favourable costs. This will lead to saturation of Indesit’s production capacity in Poland and new capacity in Turkey (also to exploit opportunities in rapidly expanding markets in the Middle East and North Africa).
Further investments of €70m are planned in Italy over the period 2014-2016: they will be channelled into product and process innovation, with a strong focus on containing water and energy consumption and on recyclability and digital technologies.
The Plan will also involve a streamlining of the central management departments to make processes faster, more effective and with costs geared to this new and more competitive phase. Re-organization of the Group’s Italian operations, which currently employ around 4,300 people, will affect over 1,400 people (25 executives, 150 central office staff and 1,250 blue and white collars in factories). In line with Indesit’s traditionally transparent approach to industrial relations and socially responsible management of all re-organizations, talks have been opened with the trade unions to identify all possible and sustainable solutions to keep the employees involved in occupation through suitable use of welfare support.