Prolonged losses finally take their toll on the German press manufacturer, which will cut its web workforce by 207 to address a ‘significantly shrunken global market.’
Addressing the reality that the market for high-end web offset presses is never going to recover to pre-crisis levels, KBA is cutting the number of jobs at its subsidiaries Albert-Frankenthal and KBA-FT Engineering to 164. Both firms are located in Frankenthal, Germany, and are highly dependent on the web offset market segment.
KBA is also the second largest sheetfed offset press manufacturer after Heidelberg. It is grappling with a stagnant market and continuing losses – AUD$112 million in 2013. It is also downsizing its manufacturing workforce.
Currently there are 222 employees on the web manufacturing payroll at Albert-Frankenthal and 149 at KBA-FT Engineering, 28 of which will leave due to natural turnover. Accordingly, the current agreement effects some 180 staff. They are to be made redundant by 31 October 2014 and will have the opportunity to qualify for a new position for one year at a transitional company from 1 January 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.
In a press release the company said, 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 utilisation 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.
KBA is the ‘other’ large German web press manufacturer after manroland, which went through its own difficulties a three years ago. Following a company collapse its web business was restructured under a new owner, Possehl, with a slimmed down workforce and a more sustainable business model. It has successfully completed a major relocation and refurbishment of Fairfax web presses in both NSW and Victoria in June this year.
The other major web press manufacturer, Goss, Internaational, has its HQ in the USA, but is owned by the giant Shanghai Electric Corporation of China with manufacturing plants in US, Asia and Europe.