Jul 13 2006
Alcan has announced that it has begun consultations with unions and employee representatives for a proposed closure of two U.K. sites, one in each of its Engineered Products and Alcan Packaging groups. The Company expects to incur a pre-tax, non-recurring, charge of approximately US$40 million in the second quarter of 2006 related to the proposed closures.
"Alcan reviews its portfolio on an on-going basis to ensure the competitiveness and long-term viability of each of its businesses," said Richard Evans, President and Chief Executive Officer, Alcan Inc. "Today's proposed measures are due to challenging business realities and consistent with consolidating Alcan's operating footprint to leverage core competencies and improve efficiencies," he added.
The proposed reorganisation would result in:
- The closure of the Workington, U.K. Aerospace, Transportation and Industry hard-alloy extrusion plant; and
- The closure of the Midsomer Norton, U.K. food packaging plant.
The Workington plant produces stringers and bars for the aerospace and engineering markets. The reorganisation plan is aligned with Alcan's Engineered Products strategy of focusing its strengths towards creating specialised and efficient manufacturing sites. Production from Workington would be consolidated at Alcan's facilities in Issoire and Montreuil-Juigné, France. Workington would cease production by the end of the 2nd quarter 2007. The reorganisation plan would affect all 161 Workington employees.
The Midsomer Norton site produces flexible food packaging for the U.K. snack market. The plant has been adversely affected by a declining demand in the U.K. market and high raw material costs. The site is expected to close by the end of 2006 and all 218 employees would be affected. Alcan Packaging would continue to supply the U.K. snack market from its remaining European sites.
While implementing this reorganisation plan, Alcan will continue to serve its customer's needs at the highest level.
"After thoroughly exploring and examining various alternatives, this proposed reorganisation represents the most viable solution to ensure the long-term competitiveness of Alcan's European assets. The Company has a long tradition of treating its employees fairly and is committed to carrying out this proposed reorganisation process transparently, so as to find the best solutions for the affected employees," said Jean - Christophe Deslarzes, Senior Vice President, Human Resources, Alcan Inc.
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