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Fokker slashes costs in new restructuring plan

Kevin O'Toole/LONDON

Fokker has embarked upon a radical programme of restructuring, job cuts and site closures in a bid to pull itself back into profit by mid-1996.

Losses have been mounting at the Dutch manufacturer as output has dwindled to only 50 aircraft a year - from a peak of 85 - and the latest round of cuts is seen as a final attempt by Fokker to put its house in order.

The main thrust of the restructuring centres on slashing the costs of its components-manufacturing operations, which will now be slimmed down and split out into a new aerostructures division. Aircraft assembly and design operations will be concentrated under a separate Fokker Aircraft business unit.

Among the casualties will be the head-office building at Amsterdam-Zuidoost. Staff will be moved to another site.

The Ypenburg components plant is also to be closed, with its composites and metal-bonding operations consolidated elsewhere and its interior-parts department sold off.

As part of the drive to shrink the business, the company says that it plans to contract out any non-core activities which "...can be performed more cheaply outside".

It will also renegotiate contracts with existing suppliers on the basis of risk and revenue-sharing partnerships. These suppliers, which include its parent Daimler-Benz Aerospace (DASA), contribute around two-thirds by value to each Fokker aircraft.

Fall-out from the restructuring will result in Fokker's workforce of 8,500 being cut back to 7,300 by the end of this year, before falling to 6,700 by the time the revamp is complete in mid-1996. At its height, it employed around 12,500.

Most of the job losses will come from among office and support staff, but Fokker says that its engineering department will be "...slimmed down considerably" and strengthen links with DASA.

The Fokker re-organisation is broadly in line with the sweeping restructuring which took place at regional-jet rival British Aerospace in 1993. BAe has trimmed employment to only 2,500 assembly and marketing jobs at Avro and another 1,200 at Jetstream.

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