Metalcasting and manufacturing group Georg Fischer AG has issued an ad hoc statement, anticipating poorer results because of declining demand from automakers and machine-tool manufacturers. The group acknowledges it has “been confronted with a slump in demand” since October, and that its relevant business units, GF Automotive and GF AgieCharmilles, are preparing “profitability and efficiency programs” to minimize the effects of “the severe economic downturn.”
Switzerland-based Georg Fischer has 50 plants worldwide. Another business unit, GF Piping Systems, has maintained its level of activity.
Georg Fischer’s iron casting and light-metal diecasting operations are organized under the GF Automotive unit. The company stated it recorded “buoyant demand” in passenger and commercial vehicle markets through September, with production above capacity levels. “Starting in October,” according to the statement, “various carmakers have drastically scaled back production, and orders for cast parts have been revised or postponed.
“As a result, within a few weeks, most GF Automotive production plants have gone directly from a situation of overload to one of under-utilization,” the statement continued. “Georg Fischer reacted swiftly and has adjusted production volume to the change in conditions. Additional measures to boost efficiency are in place, and Georg Fischer is carefully examining each of the corporate group's sites in order to align production capacity with demand.”
GF added that it is impossible to predict how long the slump in automotive industry demand will last.
Georg Fischer states it expects annual sales in 2008 to be even with 2007, but due to the changed economic outlook and the capacity reductions, it will make impairment charges to its 2008 income statement and will reduce the 2008 EBIT forecast to 3-4%.