STOCKHOLM, Sweden (Dec. 5, 2008) — Swedish rubber products maker Trelleborg A.B. may trim up to 10 percent of its workforce in 2009 in response to the “challenging” global economy, although it views the situation for its tire and wheel business as “favorable.”
In the automotive sector, which accounts for nearly one-third of the firm's sales, Trelleborg is preparing to cut a quarter of its workforce.
“To adapt capacity to the decline in demand, Trelleborg Automotive has had a program in progress since 2006,” the company said in documents prepared for its annual “Markets Day” series of meetings with stock analysts in Stockholm.
“Combined with further cutbacks, Trelleborg expects that the number of employees within Trelleborg Automotive is decreasing by approximately 2,400 in 2008 and 2009. This will mean that total employment within Trelleborg will fall by 10 percent by 2009.”
Overall, Trelleborg said, “Short-term focus will be on cash flow and defending profitability and margins. The clear downward trend for the company's raw material costs is having a slightly delayed effect and will generate opportunities in 2009.”
The Trelleborg Wheel Systems business area continues to develop favorably, the firm said, as the market for tractor tires continues to develop toward increasingly larger tires, a segment in which Trelleborg is capturing market share. The market for solid tires is expected to fall in line with the downturn in the global industry, Trelleborg said, although this segment should benefit from the long-term structural growth connected with increased global trade.
“We have an increasingly focused and profitable operation within large segments of our business, and we are convinced that we will emerge strengthened from the slowdown that we are currently experiencing in many markets,” said Trelleborg CEO Peter Nilsson. “At the same time, demand within (the) Energy and Infrastructure (businesses), for example, remains strong.”
Trelleborg also pointed out it has a history of substantial cash generation and stable finances. Most of its long-term financing, for example, stretches to 2012 and there still is $756 million in unused capital at the end of the third quarter.