Helsinki, Finland – Nokian Tyres will start statutory negotiations with all its 900 personnel in Nokian Tyres plc, in Nokia, Finland on 14 Aug in a bid to “adjust” its operations, the company announced on 7 Aug.
The company said that the agenda for the negotiations included a plan to decrease the annual output of passenger car tire production at the Nokia factory, with the aim of saving approximately €8 million per year.
Also, the plan will involve a maximum of 150 job cuts, Nokian added.
Nokian downgraded its outlook for 2015 due to the weakened economic situation in Russia and CIS countries.
“Car tire sales have continued to decline in these areas. The weakened economic situation and the planned production cuts at Nokia plant have created the need to rationalise operations and execute structural changes,” the company announcement said.
“Our production volumes are lower this year than last year. The volumes will likely return back to growth next year, but the coming few years’ growth can be managed with the existing unused capacity”, says Ari Lehtoranta, CEO of Nokian Tyres.
“Russia has been able to avoid the worst case economic scenarios and the confidence in the market is gradually returning. However, the situation is very volatile and in most retail segments the volumes have been very low, especially in the second quarter. In new car and tire sales, the Russian market has been lower than we expected, and the tire purchasing has moved more towards lower B and C segments.
“… In North America our performance has been excellent. We have gained market share in our core segments and exceeded market growth now already for several quarters, achieving a sales increase of 26.8 percent versus the first half-year of 2014,” said Lehtoranta.
Nokian’s net sales in the second quarter dropped by 6.5 percent to €345.5 million from €369.5 million the previous year. Operating profit was down by 11.2 percent to €80.6 million for the same period.
On a half-year basis, net sales declined by 8 percent €626.8 million while operating profit was down by 19 percent to €128.8 million.