Wärtsilä sheds European jobs as market slows

Wärtsilä plans to move the majority of its propeller production and auxiliary engine production to China, close to the main marine markets. The current propeller manufacturing in Drunen, and the component manufacturing DTS in Zwolle, both in the Netherlands, are planned to be closed. The Wärtsilä 20 generating set production in Vaasa Finland is planned to be closed and moved to China in order to stay competitive in this market.

In the course of 2010 Wärtsilä plans to reduce approximately 1,400 jobs globally within the Group. Of these reductions 570 are planned to be in the Netherlands. The remaining reduction will impact various divisions, functions and countries and will be clarified during the first half of this year. Currently Wärtsilä employs 1,561 people in the Netherlands.

‘The world has dramatically changed in a short period of time, said Wärtsilä president and CEO Ole Johansson. ‘China has become a strong maritime centre and its growth will continue. The low activity in the global marine market continued throughout 2009. Wärtsilä Ship Power’s order intake was significantly lower than during previous years. Competition in the market will intensify. By developing our manufacturing footprint and our businesses for the future key markets Wärtsilä will further improve its competitiveness and service to our customers in the tightening markets. It is our responsibility to ensure Wärtsilä’s leading position now and in the future.’

The non-recurring costs related to the restructuring will be approximately €140m, including non-cash write offs of approximately €50m. Wärtsilä is looking for cost savings of approximately €80m to €90m. The effect of these savings is expected materialise gradually this year and take full effect in the first half of 2011.

Wärtsilä’s net sales for this year will be impacted by the marine market situation and a lower order book. They are expected to be 10 to 20% below 2009.

Formal consultation processes will be initiated in the affected countries according to local practices and legislation. The company will provide support and consultation as well as assistance in re-employment in the impacted countries.

Wärtsilä will continue the manufacturing of large four stroke engines in Europe, at factories in Vaasa, Finland and Trieste, Italy. The R&D activities in Europe will be maintained in their current locations. In the Netherlands, Wärtsilä will establish a Propulsion Technology & Services Centre.