Redimensioning of Swiss Rieter manufacturing site in Winterthur
Over the last few years, the spinning industry continued to move to Asia. A logical consequence was that Rieter made significant investments in China and India by adding production capacities in these countries. On top, the appreciation of the Swiss Franc has additionally contributed to a change in the business environment
Last March, Rieter announced the intension to streamline production in Winterthur (CH) and reducing sourcing in Swiss Francs. Both measures took place as a response to the changing business environment.
The proposed streamlining of production provides for Rieter a concentration on the assembly of machinery in Winterthur and thus to discontinue machining and sheet metal operations there. The corresponding discontinued production will be transferred to other Rieter sites and suppliers, while the remaining production can be realised in a single building in Winterthur. The machinery currently being produced in Winterthur will continue to be assembled and tested there, thus the provision of machinery of Swiss origin is taken care of.
With the implementation of the two measures, a cost reduction of CHF 15 – 20 million should be achieved as of 2017. These proposed measures, being implemented in 2016, will lead to investments in the single-digit million Swiss Franc range. In addition, Rieter has started to develop a concept for future land deployment at the Winterthur site.
The proposed concept leads to a workforce reduction of around 150 full time equivalents at the Winterthur site. Moreover, these affect 59 temporary positions. The number of persons employed by Rieter in Winterthur totalled 855 at the end of September. Rieter foresees to minimise the number of potential layoffs through early retirement and fluctuation. Rieter has a social plan in place for potentially laid-off employees. The consultation process with the employee representatives starts on October 20, 2015.
At the end of September 2015, Rieter posted a cumulative order intake of CHF 587.1 million. The CHF 68.2 million for orders received by the Components business group in the third quarter is especially pleasing. Also, the demand dynamics in the After Sales business group were favourable in the third quarter with order intake amounting to CHF 32.3 million.
The low demand for new machinery in the third quarter resulted in order intake totalling
CHF 98.3 million at the Machines & Systems business group. Rieter will respond to the resulting lower utilisation of the production capacity at the Winterthur site. Appropriate temporary working time adaptation measures are being planned. The outlook for the business year 2015 as communicated on July 23, 2015, remains unchanged.
Rieter is the world’s leading supplier of systems for short-staple fibre spinning. Based in Winterthur (Switzerland), the company develops and manufactures machinery, systems and components used to convert natural and manmade fibres and their blends into yarns.
Rieter is the only supplier worldwide to cover spinning preparation processes as well as all four final spinning processes currently established on the market. With 18 manufacturing locations in ten countries, the company employs a global workforce of some 5011, about 22% of whom are based in Switzerland.