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Daimler rail unit cuts jobs
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November 12, 1999: 8:14 a.m. ET
Adtranz to shed 3,000 jobs, shut 6 plants in bid to halt losses
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LONDON (CNNfn) - DaimlerChrysler's rail systems unit will cut its global workforce by 12.5 percent and shut six plants in Europe and the United States as part of a radical restructuring plan disclosed Friday, in a bid to stem losses.
Berlin-based Adtranz will shed 3,000 of its 24,000 employees and cut capacity by shutting two production facilities in Switzerland, as well as factories in Portugal, Germany, Norway and the United States by the end of 2001. The moves are aimed at cutting costs by  300 million euros ($312 million).
The company said it took the drastic action to reverse three years of losses after a seven-month strategic review. "Painful cuts in our current production capacity are necessary, since we have more than twice the industrial capacity we need to cover our customers' demand. Our costs are way too high," said Rolf Eckrodt, Adtranz chairman.
The job cuts and factory closures are part of the strategy to focus production at its remaining sites in Germany, the United Kingdom, Sweden and the United States.
Adtranz said it also will restructure operations at the sites it intends to keep open. Eckrodt, a former Mercedes-Benz executive, was appointed to the rail unit at the start of the year to turn the operation around.
Adtranz is one of the four major global suppliers of rail equipment, along with Germany's Seimens, Canada's Bombardier and Anglo-French Alstom. All four companies continue to suffer in the highly competitive market place, despite consolidation in recent years.
The railroad market is a mix of privatized companies seeking the best possible deal from suppliers and nationalized railroads, which are prevented by political considerations from pursuing competitive bids. 
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Adtranz
DaimlerChrysler
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