Supervisory Board of Demag Cranes AG Grants Approval for Restructuring – Impact of the Financial and Economic Crisis Makes Up to 750 Job Cuts Necessary Worldwide
Düsseldorf, 18. May 2009
At its most recent meeting, the Supervisory Board of Demag Cranes AG granted approval for the restructuring measures proposed by the Management Board. This will involve up to 750 job cuts worldwide. In the current financial year, provisions in mid-range double digit euro millions will be made to implement these packages of measures so as to achieve significant savings in the following years to ensure that the Group will be able to meet the challenges of the future. As has already been announced on several occasions, with these measures the Management Board has responded to the worsening of the economic and financial crisis that has had adverse consequences for the business development of the Demag Cranes Group.
This action has become necessary due to the significant fall in demand for products both in the Industrial Cranes and Port Technology segments. As the crane and material handling sectors are affected late in the economic cycle, the Demag Cranes Group is only now feeling the full impact of the global economic and financial crisis with a delay of around six months. As a result, Group order intake in the second quarter of financial year 2008/2009 was down by more than 40 percent from the previous year. As the extent and duration of the crisis still cannot be predicted, these packages of measures will now be implemented to secure the financial stability of the Group on the basis of its sound balance sheet. In particular, it is necessary to lower the break-even points in order to improve the Group's ability to operate in a highly competitive environment.
Consequently, the Company believes that capacity adjustments cannot be tackled using labour policies such as shedding temporary workers or implementing short-time working alone. The Supervisory Board of
Demag Cranes AG supports this view.
About Demag Cranes AG
The Demag Cranes Group is one of the world's leading suppliers of industrial cranes and crane components, harbour cranes and terminal automation technology. Services, in particular maintenance and refurbishment services, are another key element of the Group’s business activities. The Group is divided into the business segments Industrial Cranes, Port Technology and Services and has strong and well-established Demag and Gottwald brands. Demag Cranes sees its core competence in the development and construction of technically sophisticated cranes and hoists as well as automated transport and logistics systems in ports and terminals, the provision of services for these products and the manufacture of high-quality components.
As a global supplier, Demag Cranes manufactures in 16 countries on five continents and operates a worldwide sales and service network that is present in over 60 countries through its subsidiaries, representative offices and a joint venture. In financial year 2007/2008, the Group, with its 6,093 employees, generated revenue of EUR 1,225.8 million. Since the end of June 2006, the Demag Cranes share (WKN: DCAG01) has been listed in the Prime Standard of the German Stock Exchange and is traded on various indices including the MDAX®.
Demag Cranes AG. We Can Handle It.
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This press release contains forward-looking statements relating to the business, financial performance and earnings of Terex Material Handling & Port Solutions AG and its subsidiaries and associates. Forward-looking statements are based on current plans, estimates, projections and expectations and are therefore subject to risks and uncertainties, most of which are difficult to estimate and which in general are beyond the control of Terex Material Handling & Port Solutions AG. Consequently, actual developments as well as actual earnings and performance may differ materially from those which are explicitly or implicitly assumed in the forward-looking statements. Terex Material Handling & Port Solutions AG does not intend or accept any obligation to publish updates of these forward-looking statements.