Saab is to retrench 200 staff at its Swedish operations and close several facilities. The company’s operations in South Africa will not be affected for the moment, a media statement says.
“As a part of a long term strategic adaptation to changing market conditions the operations within the Dynamics business area will be reorganised. Saab intends to serve notice to more than 200 employees. Moreover, the Electronic Defence Systems business area and functions within Corporate [sic] will be made more efficient,” the statement adds, saying the total costs for these measures will amount to approximately SEK500 million (about R511 million) “The costs will primarily affect the operating income in the fourth quarter 2010.” The measures are expected to have a positive effect on the operating income amounting to approximately SEK200 million (R204 million) on a yearly basis with full effect from 2012.
Saab CE Håkan Buskhe says the move is necessary in order to grow the business “and continue as one of the world’s leading high technology companies.” Buskhe adds Saab has “to be more cost efficient and develop products and services that are in demand now and in the future. These structural changes entail us to concentrate our operations through reducing the number of facilities as well as by making the company more efficient in areas where we have too high administrative costs.
As part of the rationalisation, Saab Dynamics will terminate its operations in Eskilstuna in 2012 and move part of the remaining production to Karlskoga next year. “All employees in Eskilstuna will be served notice.”
The underwater vehicles operation, based in Motala, Sweden, will be integrated with the UK-based Saab Seaeye Ltd. to create “a world leading company within underwater vehicles for the civil and military markets.” A Swedish Seaeye office will be established in Linköping. All employees within the Underwater Weapons and Sensors operations in Motala will be served notice.
Under the condition that the ongoing discussions with potential clients lead to a long-term agreement, parts of the operations will instead be combined and integrated with Dynamics in Linköping.
Within the Electronic Defence Systems business, “several efficiency measures are ongoing”. The operations in Stockholm are being gathered in one place, since the business in Kista is moving to Järfälla. “The operation in Mölndal is gradually moving to Gothenburg. Furthermore, detail construction and production within the microwave area are gathered in Gothenburg and Centurion, South Africa. This means that the microwave and antenna construction in Järfälla will be terminated.”
At the corporate level, an analysis is ongoing to identify measures to reduce administrative costs. A dialogue has been initiated with the concerned trade unions and the notices will not affect the capability of Saab to meet its obligations. “We will now start the restructuring process and the notices in collaboration with the trade unions with respect for both the individual personnel and our operations,” says Buskhe.
“In order to remain competitive, Saab is continuing its evaluation of operations, and further notices cannot be ruled out.”