By Shahrzad Pourriahi, Crain News Service
HELSINKI, Finland (Aug. 10, 2015) — Nokian Tyres P.L.C. is seeking to cut up to 150 jobs at its tire plant in Nokia, Finland, in line with planned production cutbacks there necessitated by the weakened economic picture in the company's key markets in Russia and eastern Europe.
The tire maker said it will start statutory negotiations with 900 workers next week to “adjust” its operations. Nokian said it hopes to realize operating savings of $8.7 million through the job cuts.
Nokian did not say how much it intends to throttle back passenger tire production nor whether the job cuts would be permanent. Besides passenger tires, the plant in central Finland also makes light truck, farm, OTR and industrial tires and is rated at 76,000 metric tons output per year.
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,” said Nokian Tyres CEO Ari Lehtoranta.
“Russia has been able to avoid the worst case economic scenarios and the confidence in the market is gradually returning,” he added. “However, the situation is very volatile and in most retail segments the volumes have been very low, especially in the second quarter.”
Despite the job cuts, the factory in Nokia “remains important not only for the volumes it produces but also in developing new products and production processes,” Mr. Lehtoranta added.
Shahrzad Pourriahi is a reporter for European Rubber Journal, a United Kingdom-based sister publication of Tire Business.