PKC Group adjusts its North American organization and production capacity to medium term demand outlook


PKC Group Plc     Company announcement    10 August 2016    8.05 am

 

PKC Group adjusts its North American organization and production capacity to medium term demand outlook

 

It is estimated that North American truck production volumes continue to decrease and to be on a lower level for the medium term. The production decline is focusing on heavy-duty trucks, while the production of medium duty trucks is estimated to continue on the current level.

 

Low fuel prices and interest rates have not accelerated truck sales as expected in the USA. Stagnant freight demand, increased supply of competitively priced second hand trucks and reduced need to replace fleets have decreased new truck sales. In addition, sales channel inventory levels are significantly above the historic ten year average. Therefore, the production volumes have also started to decrease. According to LMC estimates, taking into account economic outlook for the coming years, truck production volumes will stay on a lower level for the medium term.

 

PKC has decided to reduce production capacity and to cut fixed cost in its North American operations. The personnel reductions will be maximum 1,000 persons and they will be implemented fully by the end of the year 2016. Currently PKC employs about 11,400 persons in North America. The related non-recurring items will amount EUR 4.5 million and the estimated annual cost reduction is EUR 9 million for 2017 onwards.

 

 

PKC Group Plc

 

Board of Directors

 

Matti Hyytiäinen

President & CEO

 

For additional information, contact:

Matti Hyytiäinen, President & CEO, PKC Group Plc, +358 400 710 968

 

 

 

Distribution

Nasdaq Helsinki

Main media

www.pkcgroup.com

 

 

PKC Group is a global partner, designing, manufacturing and integrating electrical distribution systems, electronics and related architecture components for the commercial vehicle industry, rolling stock manufacturers and other selected segments. The Group has production facilities in Brazil, China, Estonia, Finland, Germany, Lithuania, Mexico, Poland, Russia, Serbia and the USA. The Group's revenue from continuing operations in 2015 totalled EUR 847 million. PKC Group Plc is listed on Nasdaq Helsinki.