STOCKHOLM, Sweden (Aug. 29) — Trelleborg A.B. has notified workers at its molded goods plant in Morbylanga, Sweden, it intends to close that facility and move its production to a newer plant in Estonia.
The relocation could result in up costs up to $4.37 million plus a further $2.91 million investment in the Estonia facility. Trelleborg has begun negotiations with unions at the Swedish plant regarding the shutdown.
The Morbylanga plant manufactures mostly rubber special components such as vibration damping solutions, bushings and boots for trucks and heavy vehicles.
The company said the decision is part of its process to create a more efficient production structure with fewer and more specialized units and is designed to "ensure the future competitiveness of the Trelleborg Group´s business unit for molded components."
Trelleborg has estimated that about 110 employees will lose their jobs thanks to the closure, but it has said that it will work with trade union representatives to support those affected, and will try to find them new employment within the group.
Relocation of manufacturing is expected to begin at the end of 2007 and carry on through 2008. The molded components business unit is expected to be relocated to Trelleborg´s plant in Kuressaare, Estonia, as well as other plants in Sweden, particularly Forsheda, the company said in a statement. The Estonia union currently employs 50, a number that will rise to about 120 when the relocation is completed.
Trelleborg said that the anticipated continuous cost savings mean that the project in its entirety is expected to have a relatively short payback time.