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Thursday, 26 April, 2001, 17:05 GMT 18:05 UK
Moulinex shake-up costs 4,000 jobs
Moulinex-Brandt workers
Moulinex-Brandt workers protesting on Thursday over plans to close a French factory
"Colossal" losses have prompted a shake-up at home appliance maker Moulinex-Brandt, which is to shed 4,000 staff in an effort to return to profit.

Moulinex-Brandt, the vacuum cleaner, iron and microwave oven producer, is to axe factories in France, Brazil and Ireland in a drive to stem losses which "deteriorated significantly" last year to 130m euros.

Patrick Puy, chairman, Moulinex-Brandt
Patrick Puy: "We have to move fast"
The restructuring plan, which will save the Paris-based firm 110m euros a year, will return the company to profit by 2005, a statement on Thursday said.

"We have to reorganise the group," chairman Patrick Puy told French newspaper Le Monde. "The extent of the losses is such that we have to move fast."

Political fallout

But the proposal is likely to prompt anger among politicians and workers' groups, which have voiced disquiet over job cuts announced by firms such as Marks & Spencer and Danone as France is hit by the downturn in the global economy.

Elisabeth Guigou, French employment minister
Elisabeth Guigou: clampdown on job losses
French employment minister Elisabeth Guigou on Tuesday announced measures such as a doubling of redundancy pay to dissuade companies from making job cuts.

The announcement followed widespread demonstrations over job losses, even though France's unemployment rate is at a 10-year low of 8.8%.

Consumers have boycotted Danone products since the foods firm revealed it would axe 1,780 French jobs, and last week locked up bosses at a plant owned by aluminium group Pechiney.

'Negative results'

Moulinex-Brandt blamed last year's loss, which Mr Puy described as "colossal", on higher raw material prices, lower productivity and unfavourable exchange rates.

Trade this year has also started slowly, with turnover in the company's key Western European market down 2.5% to 257.8m euros between January and March, Thursday's statement revealed,

"Negative results in Germany weighed heavily on turnover in Western Europe," the briefing said.

Longstanding troubles

The data follows a long period of troubles for the firm, which has made considerable investment in Eastern Europe, and was badly hit by the Russian debt crisis three years ago.

Moulinex itself has only twice posted a profit in the last decade, and in 1996 announced it was laying-off of 2,600 workers in a bid to keep up with foreign competitors.

A proposal last year to shed a further 2,100 employees was shelved as the firm negotiated December's merger with El.Fi, the Italian company which owns the Brandt household appliance brand.

On the Paris stock market, Moulinex shares closed down 4.25%.

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See also:

24 Apr 01 | Europe
France tightens employment laws
09 Apr 01 | Business
French court rules against M&S
06 Apr 01 | Europe
French unions stage M&S protest
28 Feb 01 | Business
French jobless hits 10-year low
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