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Indesit Plans Reorganization of Operations in Italy
Jun 14, 2013
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Indesit Company's plan to safeguard and rationalize its organization in Italy - expected to eventually affect 1400 of its 4300 employees in-country - was presented to trade unions in Rome. The plan calls for refocusing the Group's three Italian industrial centers and an investment of [euro]70 million for product and process innovation; however, plans also call for the moving manufacture of lower-end products out of Italy to countries with lower labor costs.

The plan endorses Italy as Indesit's strategic center and provides for actions to enhance and consolidate Italian training and research & development operations.

Production will be rationalized, with the in-country emphasis on models with high levels of innovation and technological content, for the middle and top end of the market.

The Group will refocus each of its three Italian industrial centers during the 2013-2016 time period.
* The production facility in Fabriano (Ancona) will be the innovation driver for built-in ovens.
* The production facility in Comunanza (Ascoli Piceno) will be the innovation driver for front-loading washing machines.
* The production facility in Caserta will focus on built-in fridges and gas hobs.

Fabriano will be the Group's only oven manufacturing facility, and will take over the production of oven models currently made in Poland.

Production operations considered to be no longer sustainable in Italy - mainly producing products exported to Eastern European countries - will be moved to countries with lower labor costs.

The [euro]70 million in investments planned in Italy from 2014-2016 will seek to innovate water-saving and energy efficiency technology, as well as appliance recyclability and digital technologies.

The plan will also involve streamlining the central management departments to make processes faster and more effective.

Re-organization of the Italian operations, which currently has about 4,300 employees, are expected to affect more than 1,400 employees:
* 25 executives
* 150 central office staff
* 1,250 blue and white collars in factories

Indesit said that, in line with its traditionally transparent approach to industrial relations and socially responsible management of all re-organizations, it is commencing talks with trade unions to identify solutions for affected employees.

Indesit said the reorganization was necessary given the competitive scenario in Europe, where the market the market remains well below the volumes recorded in 2007. Volumes in Western Europe remained down 10% and Italy remained down 25%.

In addition, new producers from lower cost countries continue to expand with aggressive pricing and product policies, pushing down appliance prices and margins and exacerbating appliance industry production overcapacity in Europe.

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