BUSINESS
Xerox says no net job loss in Dundalk
10-01-2001
by Aoidin Scully
Xerox Europe has outlined plans to cut costs at its three European manufacturing and supply chain sites, including its site in Dundalk.
The recommendations, part of an initiative to reduce the company's manufacturing & supply chain cost base world-wide by USD200 million per year, will affect Dundalk in Ireland, Mitcheldean in the UK and Venray in The Netherlands.
"Today was about European manufacturing restructuring where Xerox global task force made serious decisions about the restructuring of certain operations," a company spokesperson explained.
"There is a certain element of production leaving Dundalk to go to a different geographic region, but it's low end manufacturing and it's being replaced by more high end manufacturing work."
The spokesman said he couldn't specify the number of employees who are involved in this production line whose positions will be altered as a result of the change. But industry sources said the number of jobs involved could be as many as 130.
Xerox insists that there will be no net loss of jobs in Dundalk.
"There's 1000 people employed in Xerox at the moment in Dundalk and there's 2100 planned for employment in 2003. Xerox is still committed to achieving those figures," he said.
The troubled company, whose shares have nosedived in recent months, announced a turnarond programme last October, which includes reducing more than USD200 million in manufacturing and supply chain costs.
Over the next two or three years the company expects to see parts of Xerox' manufacturing operations move progressively towards more hardware and sub assembly sourcing from Fuji Xerox and third party suppliers in Eastern Europe and the Far East.
"The problem is economic and, despite the best efforts of our Manufacturing & Supply Chain operations to eliminate costs, our cost base is still too high in some areas," said Frans Stollman, Vice President & Director at Xerox Manufacturing & Supply Chain in Europe, who added that continued pressure on margins is exacerbating the situation further. "A radical restructuring and resizing are critical if Xerox is to remain a competitive manufacturer," he said.
Xerox also confirmed on Wednesday that it has received USD435 million in financing from GE Capital and is discussing plans for GE Capital to provide equipment financing for Xerox customers in several European countries.
Over time, the company hopes this will remove as much as USD11 billion in equipment financing-related debt from the Xerox balance sheet and reduce its future cash requirements. Since late in 2000 Xerox has fought rumours that it is facing bankruptcy.
"This affects every aspect of Xerox globally and is good news across the board," the company spokesperson said. "There have been calls lately about the liquidity issues of Xerox, but Xerox have answered those today by demonstrating they have cash flow of almost 1.8 billion."
The company said it had hired Blackstone Group LP -- well known for advising on corporate restructurings -- to help with liquidity and cash-flow management. It denied a report in the New York Post that it had hired Blackstone to advise it on bankruptcy.
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