"Given our new European structure, the planned reductions reflect a rationalisation of our regional plant footprint in response to the significant increase of overall capacity with the acquisition of BSNGlasspack," O-I's chairman and chief executive, Steve McCracken, said in a statement. "We intend to reorganise operations and transfer capacity to our other facilities in order to achieve the synergies without compromising service to ourcustomers."
Both of the affected plants were part of the company's acquisition of BSN Glasspack in June 2004, which more than doubled O-I's European presence. The moves are also linked to the company'sdecision to lower operating costs. Last month, O-I announced the establishment of a new European headquarters in Lausanne, Switzerland, to centrally manage its operations in 11 countries.
The Düsseldorf facility currently employs about 230 people and manufactures glass containers for beer, wine and non-alcoholic beverage products. The company closed one furnace at the Dusseldorf plant last month,resulting in the reduction of about 150 jobs. The plan would include shutting down the remaining two furnaces at Dusseldorf.
The Reims plant, operated by O-I subsidiary VMC, currently manufactures glass containers for the food industry. About 230 employees would be affected by the closing of one furnace at the Reims food plant, and 150 people would remain to support the other furnace. O-I also has another plant is Reims that serves the beverage industry and employs about 260people. That plant will not be affected.
Once the Düsseldorf plant is closed, O-I would have 39 manufacturing plants in Europe and about 10,200 employees.
The Düsseldorf plant was founded in 1864 and became Gerresheimer Glas. In 1999, Gerresheimer Glas was bought by BSN Glasspack. The Reims plant, located in Saint Brice, was built in 1911 with particular focus on glass packaging for the food industry. The plant currently manufactures jars, tumblers,glass pots and decoration equipment.
"The capacity reductions are a further step in O-I's previously announced strategy to optimally align the manufacturing capacities with the market and improve operational efficiencies," the company said in a statement.
About 88 per cent of O-I production is in the glass packaging sector. About 60 per cent of the company's revenue comes from outside of the US. Last month the former Owens-Illinois company announcedit was changing its name to O-I in a bid to unit its global units under a common corporate structure.