Nokia, Finland – Finnish tire-maker Nokian will cut 122 jobs and capacity to cut costs, the company announced on 28 Sept.
Nokian announced in August that it was holding talks with its 900 workers based in Nokia to restructure its business to save €8 million a year.
“Personnel reductions are always unfortunate,” said CEO Ari Lehtoranta, adding that despite the cuts the role of the Nokia factory remained “important, not only for the volumes it produces but also in developing new products and production processes”.
Nokian said it would organise training and support programmes for the dismissed employees to improve their re-employment opportunities.
Nokian downgraded its financial outlook for 2015 due to the poor Russian and CIS economies.
“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”, said Lehtoranta back in August.
“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.