- Industrial operations will cease at plants in Manchester, UK, and Tulsa, Oklahoma.
- Job reductions will cut approximately 570 positions, about 20% of the workforce.
- Annualized cost savings of approximately €60 million are expected by the end of 2020.
- A restructuring charge of around €30 million will be taken in Q2.
Operational Changes
Solvay will cease industrial operations at its plants in Manchester, UK, and Tulsa, Oklahoma, transferring activities to other facilities to increase capacity and improve efficiency. This move is part of a broader strategy to reduce costs and enhance productivity in response to reduced activity due to the COVID-19 crisis.
Job Reductions
The company plans to reduce its workforce by approximately 570 positions, or around 20% of its total headcount. These job cuts are part of the structural changes aimed at adapting cost structures and mitigating the downturn in the near term.
Financial Impact
The implementation of these efficiency plans is expected to be largely complete by the end of 2020, resulting in annualized cost savings of approximately €60 million. A restructuring charge of around €30 million will be taken in the second quarter.
Previous Measures
Earlier measures included improving operational efficiencies through increased productivity and automation, as well as a cost-reduction program in response to the reduced production of Boeing 737 MAX. Despite these efforts leading to record results in 2019 and sustained performance in early 2020, they were insufficient to counteract the significant headwinds caused by the COVID-19 crisis.
Industry Impact
The current crisis has led to an industry-wide reduction in expected demand for civil aircraft build rates in the near term, necessitating these additional efficiency measures.
