The reconfirmation of the investment plan for Romania comes at a time when Marco Tronchetti Provera, the chairman of the group anticipates decline in consumer spending, which prompted Pirelli to lay off 200 people in Italy already, while the output of the Slatina tyre plant was down to one third in December.
"For the time being, we confirm next year's investment, announced in October. The plant in Slatina is somewhat sheltered compared with other facilities because it is a new investment, with a higher technological level and a higher productivity. We have to continue to boost productivity, though," Enrico Malerba, chief executive of Pirelli Romania, stated.
Malerba added that Pirelli was currently experiencing a 30% decline in orders worldwide for the original equipment segment, and a 15% decline in the orders for the aftermarket segment.
The lesser decline on the aftermarket segment is because of orders from clients that replace their tyres for the winter season, which drives sales up.
"We expect lower demand next year, at least in the first half. Every survey shows the crisis worsening and peaking at the end of the first half, or even in the second half," Malerba continued. The international financial crisis that has also affected the business of the Italian manufacturer, has made Pirelli cut production at some of its factories or close some of them for the winter holidays early.
"We have sufficient stocks and we had to halt production. This is not a pleasant situation but we took different steps in each country where we own factories, adjusted to the situation. Therefore, we decided a short-term production halt in December in Romania," Malerba said. In order to adjust stocks, production was cut down to one third in December, after two of the three lines were turned off.
The 1,300 staff of the tyre factory were enrolled in a training programme for the duration of the production halt, to improve their skills. After the training was completed, the employees were sent home for a technical unemployment period of one week.
"Because we did not manufacture anything for a month, the result is affected by one twelfth and since we're reconfirming investments it means we are satisfied with our results in Slatina," Malerba said. He did not wish to reveal the losses generated by the production halt.
The Italian manufacturer announced that the technical unemployment period will not extend into 2009 and layoffs were out of the question given that the project was still growing and would attract new investments next year.
"We are not contemplating layoffs at the moment, especially since investments will require new employees, about 300 people, next year. Of course, it is hard to provide estimates for the time being. Our first priority now is to cope with the crisis and then think further," Malerba stated.
Pentru alte știri, analize, articole și informații din business în timp real urmărește Ziarul Financiar pe WhatsApp Channels
