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Social and
Environmental Report |
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News Release |
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News Release
November 20,2001
NSK Ltd.
Public Relations Department
NSK are implementing emergency measures to restore the sharply deteriorating earnings potential, centered in the precision products business, after having been badly affected by the collapse of the IT bubble and the simultaneous recession of the world's economy. At the same time, we have established the following schemes for business restructuring programs and shall proceed urgently with their execution.
These schemes are to aim to strengthen both management structures of product divisions and their earnings responsibility structures and, in addition, we will slim down production bases to match the hollowing out of Japanese industries and promote more reorganisation. In order to improve earnings potential, we will promote the reduction of total labour costs by reforming employment structures. Also, we shall further promote the procurement of materials and components on a globally basis in order to reduce external procurement expenditures.
As for the overseas, due to the weak Euro and the economic slowdown, the earnings potential of our European businesses has been particularly worsened. We are planning to reconstruct business bases in conjunction with reorganisation by concentrating management resources on our core businesses.
| JAPAN |
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1. Reduction of Personnel Costs.
- Reduction of wage and bonuses for Executive Officers and Management
(Emergency measure.)
- Wage and bonuses for Executive Officers: cut of 30% to 50%
- Wage and bonuses for Management: cut of 6% to 10% etc.
- Reduction of total labour costs by 10% (by March 2003)
- Introduce personnel management scheme and wage system that are appropriate for the characteristics of the business of each "spine off", those unit become independent company within NSK group. .
- Promotion of work sharing plans.
- Send extra personnel to outside companies who need extra workers.
- Reduction in temporary workers, etc.
2. Restructuring of our Production Structure in Japan
- Closure of the Akagi Plant (March 2003)
Speedy withdrawal from CVJ (constant velocity joint) business.
- Reorganise bearing plants.
Reorganise domestic ball bearing plants on one particular category of products to match shifts in demand to China and Asia.
3. Strengthen Business Management and Earning Responsibility Structures.
- "Spin off" precision products businesses (April 2002).
From business structures that are appropriate for the characteristics of the target Products.
- "Spin off" steering systems businesses (April 2002)
Generalise global steering systems businesses and become an independent steering systems supplier.
4. Reduction of External Procurement Expenditures.
- Reduction of external procurement expenditures by 10% (by March 2003)
- Reduce the number of domestic suppliers by 50%.
- Fortify global procurement. Form a supply structure in Asia for materials and components.
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5. Reorganisation of European Businesses.
- Reduction of personnel.
Approximately 1,500 employees (by December 2002)
- Review business and production structures.
Overall review of production bases in England. Decrease business scales in proportion to the economic environment: and sharply reduce costs.
- Speed up the intensification and expansion of Poland's plant as a standard ball bearing plant.
- Pare down both steering column and EPS businesses in England, reorganise them, and make them independent steering system suppliers to be placed under the direct control of the headquarters in Japan.
- Scale down Europe's head office: close down operations on Ruddington site and rationalise the existence of indirect departments, etc.
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