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310 jobs as Weir restructures pump business
PUMP INDUSTRY ANALYST
NEWS
310 JOBS GO AS WEIR RESTRUCTURES PUMP BUSINESS Weir Group plc is planning to restructure its underperforming pump and valves businesses which should see almost 500 job losses and the relocation of the company’s historic Cathcart plant to the greater Glasgow area. About 310 pump jobs will go at Weir Pumps’ sites in Cathcart, Alloa and Manchester, and at some regional sales offices, as the pump business downsizes and concentrates on growth sectors. The move from the Cathcart site is likely to take place in 2007 at the earliest. Weir says that the restructuring is being undertaken to align the business to the competitive dynamics of the market. The company intends to focus its efforts on fewer higher margin products and on markets where the cost structure enables Weir to compete effectively. Within its Valves & Controls division, Weir also plans to outsource non-essential operations and relocate its UK-based valves business to a smaller, modern facility. The plan is likely to result in around 180 job losses at
the company’s Huddersfield site. “I realise that these proposals will have a significant impact on our employees. The actions we are taking will ensure that we have a sustainable future for Weir Pumps and our UK Valves businesses,” said Mark Selway, Weir Group chief executive. This restructure is designed to return both the pump and valve businesses to profitability in 2006, with full recoveries of cash outflows expected during 2007. These restructuring programmes are expected to incur exceptional charges of around £31 million in 2005 £15 million for pumps and £16 million for valves.
COMMENT It’s the end of an era for Weir as the company prepares to pull out of Cathcart after almost 120 years. By remaining in the greater Glasgow area, Weir will crucially retain its skills base while improving the competitiveness of its UK manufacturing at a smaller facility. ■
MARCH 2005 ISSN 1359-6128 www.worldpumps.com
GARDNER DENVER TO ACQUIRE THOMAS INDUSTRIES Gardner Denver Inc has signed a definitive agreement to acquire Thomas Industries Inc in a transaction valued at U$476.4 million. When the deal closes later this year, Thomas Industries will become a subsidiary of Gardner Denver and will no longer be a publicly traded company. “In the fall of 2004, the board of directors embarked on a review of strategic alternatives in order to enhance shareholder value. This transaction represents the culmination of those efforts,” said Tim Brown, chairman, president and CEO of Thomas Industries. At the time Pump Industry Analyst reported that Thomas Industries was considering a number of alternatives, including the possible sale of the company (see Pump Industry Analyst, December 2004). Thomas Industries, headquartered in Louisville, Kentucky, manufactures Rietschle Thomas brand pumps and compressors and Oberdorfer bronze and high alloy liquid pumps. The company also offers automotive component castings as well as Welch laboratory equipment. Thomas Industries has wholly-
owned operations in 21 countries across five continents. For 2004, Thomas generated revenues and operating income of US$410.1 million and US$208.8 million, respectively. “We expect the Thomas product portfolio to complement and enhance the Gardner Denver offering in terms of channels of distribution, applications and regions of the world served. This acquisition allows us to continue pursuing our strategic goals through leveraging our international opportunities and better serving our customers on a worldwide basis,” said Ross Centanni, chairman, president and CEO of Gardner Denver. The acquisition opens new sales channels for Gardner Denver through Thomas Industries’ OEM focus and new growth markets through its leading position in the medical market segment. In 2004, approximately 23% of Thomas’s revenues came from this higher-growth market segment. Additionally, the acquisition extends Gardner Denver’s global revenue base as more than 60% of Thomas Industries’ sales are to customers outside the US. Gardner Denver completed the acquisition of Nash Elmo last year (see Pump Industry Analyst, September and August 2004). For Thomas Industries’ and Gardner Denver’s latest financial results see Company Watch pages 7 and 9.
CONTENTS CALENDAR 13 COMPANY PROFILE 5–6 COMPANY WATCH 7–9 DIARY 15 DIVIDENDS 12 ECONOMIC REVIEW 14 IN BRIEF 10,11,12,13 MARKET PROSPECTS 2–4 NEWS 1,12,13,16 NPD 14 ORDERS 11 PEOPLE 10 STOCK WATCH 15 ISSN 1359-6128/05 © 2005 Elsevier Ltd. All rights reserved. This journal and the individual contributions contained in it are protected under copyright by Elsevier Ltd, and the following terms and conditions apply to their use: Photocopying Single photocopies of single articles may be made for personal use as allowed by national copyright laws. Permission of the publisher and payment of a fee is required for all other photocopying, including multiple or systematic copying, copying for advertising or promotional purposes, resale, and all forms of document delivery. Special rates are available for educational institutions that wish to make photocopies for non-profit educational classroom use.
NEWS
310 JOBS GO AS WEIR RESTRUCTURES PUMP BUSINESS Weir Group plc is planning to restructure its underperforming pump and valves businesses which should see almost 500 job losses and the relocation of the company’s historic Cathcart plant to the greater Glasgow area. About 310 pump jobs will go at Weir Pumps’ sites in Cathcart, Alloa and Manchester, and at some regional sales offices, as the pump business downsizes and concentrates on growth sectors. The move from the Cathcart site is likely to take place in 2007 at the earliest. Weir says that the restructuring is being undertaken to align the business to the competitive dynamics of the market. The company intends to focus its efforts on fewer higher margin products and on markets where the cost structure enables Weir to compete effectively. Within its Valves & Controls division, Weir also plans to outsource non-essential operations and relocate its UK-based valves business to a smaller, modern facility. The plan is likely to result in around 180 job losses at
the company’s Huddersfield site. “I realise that these proposals will have a significant impact on our employees. The actions we are taking will ensure that we have a sustainable future for Weir Pumps and our UK Valves businesses,” said Mark Selway, Weir Group chief executive. This restructure is designed to return both the pump and valve businesses to profitability in 2006, with full recoveries of cash outflows expected during 2007. These restructuring programmes are expected to incur exceptional charges of around £31 million in 2005 £15 million for pumps and £16 million for valves.
COMMENT It’s the end of an era for Weir as the company prepares to pull out of Cathcart after almost 120 years. By remaining in the greater Glasgow area, Weir will crucially retain its skills base while improving the competitiveness of its UK manufacturing at a smaller facility. ■
MARCH 2005 ISSN 1359-6128 www.worldpumps.com
GARDNER DENVER TO ACQUIRE THOMAS INDUSTRIES Gardner Denver Inc has signed a definitive agreement to acquire Thomas Industries Inc in a transaction valued at U$476.4 million. When the deal closes later this year, Thomas Industries will become a subsidiary of Gardner Denver and will no longer be a publicly traded company. “In the fall of 2004, the board of directors embarked on a review of strategic alternatives in order to enhance shareholder value. This transaction represents the culmination of those efforts,” said Tim Brown, chairman, president and CEO of Thomas Industries. At the time Pump Industry Analyst reported that Thomas Industries was considering a number of alternatives, including the possible sale of the company (see Pump Industry Analyst, December 2004). Thomas Industries, headquartered in Louisville, Kentucky, manufactures Rietschle Thomas brand pumps and compressors and Oberdorfer bronze and high alloy liquid pumps. The company also offers automotive component castings as well as Welch laboratory equipment. Thomas Industries has wholly-
owned operations in 21 countries across five continents. For 2004, Thomas generated revenues and operating income of US$410.1 million and US$208.8 million, respectively. “We expect the Thomas product portfolio to complement and enhance the Gardner Denver offering in terms of channels of distribution, applications and regions of the world served. This acquisition allows us to continue pursuing our strategic goals through leveraging our international opportunities and better serving our customers on a worldwide basis,” said Ross Centanni, chairman, president and CEO of Gardner Denver. The acquisition opens new sales channels for Gardner Denver through Thomas Industries’ OEM focus and new growth markets through its leading position in the medical market segment. In 2004, approximately 23% of Thomas’s revenues came from this higher-growth market segment. Additionally, the acquisition extends Gardner Denver’s global revenue base as more than 60% of Thomas Industries’ sales are to customers outside the US. Gardner Denver completed the acquisition of Nash Elmo last year (see Pump Industry Analyst, September and August 2004). For Thomas Industries’ and Gardner Denver’s latest financial results see Company Watch pages 7 and 9.
CONTENTS CALENDAR 13 COMPANY PROFILE 5–6 COMPANY WATCH 7–9 DIARY 15 DIVIDENDS 12 ECONOMIC REVIEW 14 IN BRIEF 10,11,12,13 MARKET PROSPECTS 2–4 NEWS 1,12,13,16 NPD 14 ORDERS 11 PEOPLE 10 STOCK WATCH 15 ISSN 1359-6128/05 © 2005 Elsevier Ltd. All rights reserved. This journal and the individual contributions contained in it are protected under copyright by Elsevier Ltd, and the following terms and conditions apply to their use: Photocopying Single photocopies of single articles may be made for personal use as allowed by national copyright laws. Permission of the publisher and payment of a fee is required for all other photocopying, including multiple or systematic copying, copying for advertising or promotional purposes, resale, and all forms of document delivery. Special rates are available for educational institutions that wish to make photocopies for non-profit educational classroom use.