Perlos to shut down Ylöjärvi component factory - 600 jobs on the line

Excess production capacity to be moved to Hungary

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Perlos, which manufactures plastic components for mobile telephones, announced on Wednesday that it plans to shut down its factory in Ylöjärvi, near Tampere, by the beginning of next year.
      The news came as a shock to the factory's 600 employees. The factory had undergone an expansion just two weeks ago. New employees were hired and old ones had been given permanent positions.
     
Discussions between management and personnel are to begin in early May on the arrangements. Perlos plans to keep only about 40 people at Ylöjärvi in its research and development facility.
      The company said that Perlos has excess production capacity in Finland. According to CEO Isto Hantila, the logical move was to close the Ylöjärvi unit, which is separate from the company's factories in Joensuu. The Ylöjärvi factory operates in a rented building, which means that it is the cheapest installation to shut down.
     
Local management at the Ylöjärvi factory heard about the company's decision only about two days before Wednesday's announcement. The move had reportedly been under preparation from the beginning of the year.
      The planned shutdown came as a surprise to the workers, especially because the factory had reached all of its production targets. Most of the production in the facility goes to the Nokia factory in Salo.
      Perlos projects in Finland have been experiencing a constant decline, and the future does not look any more promising. Growth is greatest in China, Mexico, and Brazil, where the company is expanding rapidly.
      In Europe, the focus is on Hungary. The company plans to move its excess export production capacity in Finland to Hungary, where labour costs are just a fifth of what they are in this country.
     
A formal decision on shutting down the factory has not yet been made. In the talks with personnel, the company will examine the possibilities of placing some of the employees in the company's other facilities.
      Shop stewards said that the working atmosphere at the Ylöjärvi factory had been positive, and that the employees had helped develop production along with the factory's management.
      "This is an unreasonable prize for the work and sacrifice", said Marja-Leena Helin, head shop steward of the company's white collar workers.
     
The news also came as a bitter blow to the town of Ylöjärvi, where Perlos is the largest private employer. The company's steady growth has brought dozens of jobs to the town (pop. 22,000) on the edge of Tampere, ever since Perlos set up shop in 1996.
      Perlos is something of a rare bird in the area: an electronics cluster company in a region more closely associated with the engineering and metals industries. There are few other workplaces of this type close at hand, and Marja-Leena Helin and her colleagues were sceptical whether very many Perlos employees would be eager to relocate to Joensuu.
      Perlos reported first quarter figures on Wednesday that showed profits down 87% from EUR 16 million to just EUR 2.1 million on slightly reduced net sales of EUR 124 million. The company's stock took a big hit, falling around 17% in Helsinki.


Links:
  Perlos press release 27.4.2005: Perlos starts co-determination negotiations at the Ylöjärvi plant in Finland

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