Wärtsilä to slash jobs, shift propeller production to China. Wärtsilä plans to slash 1,400 jobs from its global payroll this year--570 of them in the Netherlands. The company says it has "analyzed its manufacturing footprint." It plans to reduce its manufacturing capacity and to move the majority of its propeller production and auxiliary engine production to China.

The current propeller manufacturing in Drunen, and the component manufacturing DTS in Zwolle, both in the Netherlands, are to be closed. Wärtsilä 20 generating set production in Vaasa Finland will be closed and moved to China in order to stay competitive in this market.

"In the course of 2010 Wärtsilä plans to reduce approximately 1,400 jobs globally within the Group. Of these reductions 570 are planned to be in the Netherlands. The remaining reduction will impact various divisions, functions and countries and will be clarified during the first half of this year. Currently Wärtsilä employs 1,561 people in the Netherlands," says a company statement.

"The world has dramatically changed in a short period of time. China has become a strong maritime centre and its growth will continue. The low activity in the global marine market continued throughout 2009. Wärtsilä Ship Power order intake was significantly lower than during previous years. Competition in the market will intensify. By developing our manufacturing footprint and our businesses for the future key markets Wärtsilä will further improve its competitiveness and service to our customers in the tightening markets. It is our responsibility to ensure Wärtsilä's leading position now and in the future," says Ole Johansson, President & CEO.

The non-recurring costs related to the restructuring will be approximately EUR 140 million. This includes non-cash write offs of approximately EUR 50 million of which EUR 40 million is recognized in 2009. Wärtsilä is looking for cost savings of approximately EUR 80-90 million. The effect of the savings will start to materialize gradually during 2010, and will take full effect in the first half of 2011.

The cutbacks and changes announced today are part of a process that saw the company slash 600 jobs in 2009. Its workforce totaled 18,541 at the end of last year.

Wärtsilä says it will continue the manufacturing of large 4-stroke engines in Europe; in Vaasa, Finland and Trieste, Italy. R&D activities in Europe will be maintained in the current locations. In the Netherlands Wärtsilä will establish a Propulsion Technology & Services Center.

Preliminary financial information about 2009 and prospects for 2010

Wärtsilä' says its net sales grew 14% in 2009 and profitability before non-recurring items improved compared to 2008. In 2010 Wärtsilä's net sales will be impacted by the marine market situation and lower order book. Net sales for 2010 will be 10-20% below 2009. Profitability before non-recurring items is expected to be approximately 9-10%, which is at the upper range of Wärtsilä's long term profitability target.

Wärtsilä will publish its Financial Statements Bulletin on January 28, 2010 at 8.30 am EET.