Inspection Copy

SWISSMETAL
The Restructuring of 2002-2009
Case study
Reference no 310-260-1
This case was written by Michael Boppel and Professor Dr Christoph Lechner,
University of St Gallen. It is intended to be used as the basis for class discussion
rather than to illustrate either effective or ineffective handling of a management
situation. The case was written with the support of a Philip Law Scholarship
awarded by ecch. The case was made possible by the co-operation of
Martin Hellweg and Swissmetal Holding Ltd.
© 2010, University of St Gallen.
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310-260-1
SWISSMETAL
THE RESTRUCTURING OF 2002-2009
Case Study
Authors
Dipl.-Wirt.-Inf. Michael Boppel
Institute of Management
University of St.Gallen
&
Prof. Dr. Christoph Lechner
Institute of Management
University of St.Gallen
This case was made possible through the generous co-operation of Martin Hellweg and Swissmetal
Holding Ltd. The case is intended as a basis for class discussion rather than to illustrate either effective or
ineffective handling of management situations. © 2010 Michael Boppel and Christoph Lechner, Institute
of Management, University of St.Gallen. All rights reserved. No part of this publication may be
reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any
means – electronic, mechanical, photocopying, recording, or otherwise – without the permission of the
copyright owner.
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Swissmetal: The Restructuring of 2002‐2009 INTRODUCTION
“Stay the course! People shouldn't be treated this way! If the Boillat is gone, this valley will die!”,
shouts the mayor of Reconvilier. The crowd responds “La Boillat Vivra! La Boillat Vivra!” It is
January 25, 2006, and the workers have assembled in front of Swissmetal’s Jura-based Reconvilier
plant. They fear that the concentration of all Swissmetal’s foundry activities in Dornach will
ultimately lead to the closure of the whole plant. The entire region becomes involved. Local
businesses donate 10% of their revenues to support the strikers, musicians give concerts, actors
perform plays, authors read from their books, and even the local minister relocates Sunday’s church
service to the Reconvilier plant to demonstrate solidarity.
This is not Swissmetal’s first experience with strikes in Reconvilier. Two years earlier, in 2004,
workers staged a 10-day strike to protest the dismissal of the plant manager, André Willemin, who had
opposed the centralization of administrative functions in Dornach and was believed to fear the
transparency resulting from the introduction of SAP as the site-wide enterprise resource software. His
threatening of Swissmetal’s supervisory board’s chairman to mobilize the whole Reconvilier
workforce to oppose Swissmetal’s management led to his dismissal. It was the start of a bitter fight for
a single site’s independence from its parent company.
This time, matters are more complicated. Swissmetal was hit hard in 2002, with the copper market
at an all-time low due to the economic crisis and its European customer base eroding as clients move
to Asia. This second strike, which is expected to last several weeks, if not months, might bring
Swissmetal to the brink of bankruptcy. Workers oppose the “new industrial concept,” the basis of
Swissmetal’s restructuring, which was developed by Martin Hellweg, Swissmetal’s CEO, and his
management team and is thought to be the only way for Swissmetal to stay in business. Having two
foundries operating only one shift per day appears to Martin to be lethal. He feels that either the new
industrial concept is implemented and the plants work closer together or Swissmetal is doomed. But
Swissmetal has strong opponents: Not only do the workers of the Reconvilier plant strike, an action
supported by the whole region, but the newly formed Swiss trade union, UNIA, launches a major
media campaign to increase the pressure on Swissmetal (Appendix 9).
SWISSMETAL GROUP
The Swissmetal Group (www.swissmetal.com), headquartered in Dornach (in the vicinity of Basel,
Switzerland), is one of the leading suppliers of high-end, “semi-finished” products made from copper
and copper alloys (see Appendix 4 for Swissmetal's history). Swissmetal’s products find their way into
a wide range of technical applications where superior performance is crucial to the value of the client’s
end product, ranging from ball-points for pens, to gear wheels for watches, to slot-wedges for power
generators. Manufacturers and users of Swissmetal's products require materials that have specific
physical, mechanical, or chemical properties, such as electrical conductivity, freedom from corrosion
and high static, and dynamic strength. A significant proportion of their products are used in electronics
and electrical engineering, such as contact pins, contact rails, and other components of connectors and
can be found in computers, aircraft, automobiles, and telecommunications devices.
In 2008, Swissmetal operated plants in Dornach and Reconvilier (Switzerland) and in Lüdenscheid
(Germany), while also pursuing other operations (see Figure 1). With the long-term goal to establish
its own production site in Asia, Swissmetal formed an alliance with a long-standing distribution
partner in India to start cold-forming activities as a first step. Furthermore, Swissmetal acquired the
U.S.-based Avins Industrial Products Corporation, starting its activities in the trading business, with a
view to offer its customers an even more complete product range and to accelerate the process of
focusing its plants on technically sophisticated products with a correspondingly high added value.
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Swissmetal: The Restructuring of 2002‐2009 In April, 2008, Swissmetal published solid 2007 figures. The company generated net sales of about
CHF 394 million. With an operating income (EBIT) of approximately CHF 15 million and a return on
invested capital of 6%, it was reasonably healthy again. However, four years earlier, in 2003,
Swissmetal faced bankruptcy. Only an intense restructuring made the 2007 results possible.
UMS Swiss Metalworks Holding Ltd.
CH-Dornach
Swissmetal – UMS Swiss Metalworks Ltd.
CH-Dornach
Avins International AG.
CH-Dornach
Swissmetal – Deutschland Handelsgesellschaft mbH
D-Deisslingen-Lauffen
Swissmetal – Lüdenscheid GmbH
D-Lüdenscheid
Figure 1: Organizational Structure 2006
THE CRISIS OF 2002
Being profitable most of the 1990s and experiencing its most successful business year in 2000 (see
Appendix 1), Swissmetal failed to recognize various major developments. As did many other
companies in the same industry, Swissmetal faced increasing competition from low-cost Asian and
East European producers and saw its clients moving to Asia (Appendix 3), leading, in particular, to
eroding margins. Hit hard by the economic downturn, Swissmetal experienced a 20% drop in revenues
in 2002.
Losing confidence in Swissmetal’s ability to service its debt obligations, banks began refusing
credit in the fall of 2002, taking Swissmetal to the brink of insolvency. As one bank after another
called in their loans, the financing banks formed a consortium, led by BW Bank, a subsidiary of the
German Landesbank Baden-Württemberg (LBBW). The aim was to pool all collateral and speak with
one voice and, thus, to better represent the creditors’ interests. These banks mandated Helbling, a
small consulting boutique, to analyze Swissmetal's current situation and develop a turnaround plan.
Time passed, but negotiations did not advance. The banks called in their loans, but no bank enforced
its rights. Without a formal standstill agreement with the banks in place, each day could have been the
end of Swissmetal. Reaching an agreement that would give Swissmetal a chance to refinance its debt
was crucial.
Late on a rainy day in Zurich in May, 2003, Francois Carrard, the president of Swissmetal's
supervisory board, called his board colleagues to inform them that he and CEO Nadine Minerath
reached a standstill agreement with the major financing banks until the end of June, 2004. “Rescued in
the last minute! This agreement gives us some time. But, we need to start from scratch,” Francois says.
He is convinced that focusing on premium products in niche markets, defined together with
Swissmetal’s management, is the correct strategy.
The banks have made it clear that the standstill agreement depends on significant changes being
made. Nadine had already laid off around 20 employees in February and stopped financing
Swissmetal's German subsidiary, Busch-Jaeger, which eventually declared bankruptcy in May, 2003.
As a member of Swissmetal's board of directors for over 10 years, Francois has seen a couple of CEOs
come and go. No one was strong enough to overcome the tensions between the Dornach and
Reconvilier plants. The board considered several internal and external candidates to replace Nadine.
“A fresh start can only be done by someone external, and by someone who is experienced with such
turnaround situations,” Francois says to a colleague. “We need someone who is able to implement his
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Swissmetal: The Restructuring of 2002‐2009 ideas, despite resistance.” One board member suggests Martin Hellweg, with whom he had
successfully managed a major crisis at Keramik Laufen, a global sanitary ware manufacturer.
A management consultant for several years, Martin, a German citizen, specializes as an interim
manager for turnaround situations. As Swissmetal seems to be a short-term assignment with a clear
end, Martin does not hesitate. Two weeks after their first contact, in June, 2003, the supervisory board
appoints Martin as CEO of Swissmetal. The board makes it clear that this will be Swissmetal’s last
chance. Martin should enforce and implement all necessary steps to refinance Swissmetal, regardless
of the interests of particular groups or local biases.
“In a restructuring situation, being dependent on banks’ decisions, it is essential to be able to
think and communicate both in financial and in operational dimensions.”
Martin Hellweg
"STOP THE BLEEDING"
Martin knows from previous assignments that he needs to turn Swissmetal on its head. He has one
year, until June, 2004, to accomplish the refinancing of Swissmetal. At that time the standstill
agreement with the banks will expire. Will a strategic or financial investor emerge; will other banks be
willing to grant loans? He is aware that obtaining new funds is the most challenging task ahead. At the
same time, however, Swissmetal needs to show short-term gains and develop a strategy that will
appeal to existing and potential investors as well as the banks. The former management team’s
planned initiatives are too timid, as they were designed to avoid an open conflict with the individual
plants, especially Reconvilier.
Operational Restructuring
Based on Helbling’s restructuring plan, Swissmetal’s new management developed 14 initiatives
encompassing more than 200 measures (see Figure 2) targeted at improving cash flow and return on
capital by increasing sales (3 initiatives), reducing costs (6 initiatives), and reducing employed capital
(5 initiatives).
Maximisation of the return of capital employed
Cash Flow
Sales
Capital Employed
Costs
Assets
1 Sales Initiative Dornach
4 Metals Margin
of Capital Employed:
10 Reduction
Acc. receivables/payables
2 Sales Initiative Reconvilier
Manufacturing Costs
5 Dornach
of Capital Employed:
11 Reduction
Stock reduction Dornach
3 Sales Initiative Group
Costs
6 Manufacturing
Reconvilier
12 Reduction of Capital Employed:
Stock reduction Reconvilier
Further Personnel Costs
7 Reduction Group
Reduction of Capital Employed:
13 Stock reduction Reconvilier
Reduction of Operating
8 Costs
Reduction of Capital Employed:
14 Divest non-operative assets
Liabilities
Reduction Holding /
9 Cost
Subsidiaries
15
Further selected projects and measures
Figure 2: Overview of Restructuring Program
Improving the Bottom Line
Swissmetal introduced lean management techniques, improved the shop and production layout, and
improved the output of the foundry and the press by 10-15%. While these measures reduced
Swissmetal’s production costs, one cornerstone was to centralize as many operational and
administrative functions as possible. Although requiring some upfront investment and by enforcing
transparent and group-wide consistent processes and procedures, the use of SAP as the only enterprise
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Swissmetal: The Restructuring of 2002‐2009 resource-planning system across all plants offered the greatest efficiencies. Previously, Swissmetal’s
sites were traditionally run as almost separate companies with high autonomy, leading to many
redundant functions (e.g., HR, Finance, IT, etc.), different management cultures, and limited potential
for creating synergies between the plants. Martin discussed this issue often with Sam V. Furrer, an
Arthur D. Little consultant, who eventually became Swissmetal’s Chief Development Officer of
Swissmetal. They are sure that Swissmetal will benefit tremendously from standardization and
centralization; however, they also know that implementing such measures will be an uphill battle,
especially with regard to the plant in Reconvilier, which inevitably has to relinquish some
independence. Martin believes that positive effects will be distant in time, probably no earlier than two
years. “How can we finance these upfront investments,” he asks Yvonne Simonis, his newly appointed
Chief Financial Officer.
Reducing employed capital
Yvonne provides a status report about ongoing projects and major key performance indicators.
“Why do most projects have a yellow or red status, why are they behind schedule,” Martin asks. For
instance, accounts receivables increased by almost 24% from January to April, 2003. He continues,
“This increased our employed capital by CHF 6.2 million. That is money that we do not have. We are
not the bank of our customers! Why is this happening?” He checks the project status and searches for
ways to reduce the days of sales outstanding (DSO). Because the majority of overdue trade receivables
are no more than one month overdue, chances of receiving payment are good. However, the increase
concerns him. Yvonne and he discuss further immediate steps. For instance, they will call the debtors
and ask for the overdue payments, check granted payment terms, reduce the number of offered
payment terms, and, in particular, shorten the due date. They will try to negotiate with the banks to
buy Swissmetal`s trade receivables. This “factoring” allows a company to turn revenues into cash
immediately, at the expense of a provision to the bank. Other measures include the reduction of
inventory by 30% and the sale of non-operating assets.
Improving the top - line
Implementing these measures led Swissmetal to break even. In order to make a profit, Swissmetal
launched several sales initiatives designed to reach set targets for the fiscal year 2003 and to achieve a
15% increase in the following year. The first step was to define responsibilities and sales targets
clearly and to reorganize the whole sales organization. Sales staff checked more often outstanding
offers and had to reconcile advertised products with the planned productions. Swissmetal began
offering discounts for certain products, training their sales personnel, and introducing a new system of
monitoring the success of sales activities. The result was additional sales of 5,000 tons (or CHF 15.8
million) of gross added value sales (sales excluding material costs). Over the course of the year,
Swissmetal reduced its bank exposure by approximately 10%, a helpful sign for later refinancing
negotiations.
In addition to operational measures, the banks demanded frequent reporting on the financial status
and the success of the restructuring measures as one of their conditions for the standstill agreement.
Yvonne knows she has no time to wait for a proper IT-backed solution. She has to figure out how to
increase the timeliness, accuracy, and transparency of both external and, especially, internal reporting.
As each plant has its own finance and controlling department, figures (e.g., on productivity) are
incomparable and misleading.
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Swissmetal: The Restructuring of 2002‐2009 Financial Restructuring
Over the course of the first year, Martin and Yvonne evaluated different financing alternatives. The
easiest and best solution for the existing shareholders was to find other banks willing to grant new
loans, thus financing the operative business and providing needed investments. Another option was to
find a strategic or financial investor willing to acquire Swissmetal from the existing shareholders, bear
initial losses, and pay for investments.
However, as time passed, it became clear that neither option was viable. Despite the need for
consolidation within the copper-producing industry, negotiations with a strategic investor will not lead
to a successful transaction, as most competitors are also suffering from the economic downturn after
the bursting of the internet bubble. In 2003, the market for copper products is at an all-time low. Thus,
potential strategic investors were reluctant to invest due to their limited financial resources and
demanding a significant contribution from the banks. In addition, Swissmetal is relatively small
compared to other, bigger players in the mass market (see Figure 3). Therefore, buying Swissmetal
does not really solve their problems.
If the leading financing banks accepted the demanded contribution, this "haircut" would lower the
barrier to investment in Swissmetal. Because of the high potential liquidation value of Swissmetal if
the company closed due to significant levels of metal stock that could be sold, a meaningful haircut
was not acceptable.
Profit 2001 (EBIT)
5%
10%
“A default is one of the banks’ biggest fears. Management and owners of an endangered
company often underrate their bargaining power."
Martin Hellweg
Wieland
Fuchs
Diehl
Prym
SM
KME
0%
Outokumpu
‐5%
Gnutti
Boliden
Standard/Mass products
Specialities
Figure 3: Copper-semi Producers in Europe
It soon became evident that a new strategic investor was not in sight and that new banks were not
willing to replace the existing banks. Granting new loans to Swissmetal were a risk most banks were
unwilling to take in such troubled times, nor did they wish to pay off other banks. Therefore, Martin
and Yvonne needed to pursue other options. New money for investments and replacing the existing
banks are required, which may dilute the ownership of existing shareholders. Three smaller investment
banks are interested in placing new shares at the capital market. But their demands are high, in
particular from existing shareholders; for example, offering new shares at about one third of the
current stock market price. The existing banks would have to agree to a small haircut as well. Time
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Swissmetal: The Restructuring of 2002‐2009 passes without any agreement; June 30, 2004 – marking the end of the standstill agreement with the
banks – is getting closer and closer. Without an agreement, Swissmetal would have to file for
insolvency, as it would not be able to pay back its loans.
Only days before the expiration of the standstill agreement, a group presented itself to Martin,
comprised of managers from Reconvilier, a customer from the Bernese Jura, and someone who
claimed to represent an external investor. They proposed a buy-out of the Reconvilier plant. The
managers assumed that the refinancing of Swissmetal could not be completed before the deadline and
prepared a plan to operate Reconvilier alone after the predicted insolvency of the parent company.
However, a solution for the refinancing of Swissmetal has just been found. On June 9, 2004, the
financing banks, the lead investment bank Lombard Odier Darier Hentsch (LODH), and the
supervisory board of Swissmetal signed an agreement encompassing a total equity capital increase of
over CHF 50 million. The par value of the Swissmetal share was reduced in two steps from 100 CHF
to CHF 9 per share. LODH bought all existing loans for a maximum of CHF 27.3 million, representing
a total write-off of CHF 6.3 million to the existing banks (a haircut of 19%). Under this contractual
agreement, LODH possessed the right to swap this debt into equity and sell shares for CHF 9 per
share. In addition, new shares were offered to existing shareholders, at the same price. All shares not
subscribed by existing shareholders were underwritten by the three specialized investment banks:
LODH, OZ Bankers, and Jefferies. As most existing shareholders did not use their subscription rights
in full, this capital increase represented a dilution of approximately 87%. Although a significant loss
for existing shareholders, an insolvency would have meant a total loss. Martin and his team are
thankful that they were able to secure the financing of Swissmetal.
“Successful refinancing of the company, including a capital increase resulting in 87% new
shares (quasi “re-IPO”) led to a new start following the near collapse in 2002-2003."
Martin Hellweg
THE TURNAROUND
Upon Martin’s successful completion of his initial assignment, the banks demanded that he lead
the subsequent repositioning. Swissmetal’s financial needs are secured for the next couple of years;
now, a set of initiatives that will eventually help reduce operating costs needs to be implemented.
Major adjustments must be considered, that, to Martin, are inevitable to guarantee Swissmetal’s longterm survival. Swissmetal needs to find growth areas for the future and to significantly reduce costs of
its current business (which, over time, is eroding and, eventually, disappearing in Europe) in order to
stay competitive.
Operational Restructuring: Project "Sputnik"
In addition to streamlining administrative functions, which have been maintained separately in
Dornach and in Reconvilier, Swissmetal has to change its plant and production footprint. This is
particularly true for foundry production, where costs are almost independent of production volume. A
foundry needs energy and personnel, regardless of its utilization. As a result of long-standing tensions
between the plants, the organizational structure leads to problems and inefficiencies. Although a closer
integration had been planned, many workers and managers favored benefits for one particular plant
over Swissmetal’s overall success. Because local forces blocked changes, integration was never fully
achieved. In order to find a solution that all plants will support, Martin set up the "Sputnik" project in
February, 2005. This project team, consisting of representatives from all plants, evaluated possible
options for reducing costs by integrating production sites more closely and developing a
comprehensive industrial concept.
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Swissmetal: The Restructuring of 2002‐2009 Status Quo
Producing only copper-alloy-based, semi-finished products, Reconvilier focuses predominately on
small rods and wires, while Dornach focuses on rods, tubes, and profiles in significantly bigger
dimensions. As both plants were, and are still, operated with great independence, both conduct all
activities of the value chain (see Figure 4). Each runs their own foundry activities, their own presses
(Dornach, four and Reconvilier, two), and their own finishing lines. In February, 2005, the supervisory
board decided to install a new central press and foundry center in Dornach, mainly because product
dimensions make it more difficult to transport work in progress and because Dornach has better
transportation logistics. Furthermore, Swissmetal could afford only one new press, as this represents a
major investment made only every decade or two. It is clear from the start that the new extrusion press
must be versatile and suitable for all products produced at both plants. Those produced in Reconvilier
are smaller; thus, the intermediate products can be easily transported from an extrusion press in
Dornach to the finishing lines in Reconvilier, and vice versa. Products produced in Dornach are much
larger; in addition, the Dornach location is close to a harbor, an airport, and highways. Although
keeping the current structure is considered, it leaves too many potential synergies unrealized.
Swissmetal needs specialized staff to run both plants and to operate the foundries and presses.
Inventories for metal and waste, separate laboratories, energy and water supply, exhaust gas filters,
and tool shops also have to be maintained and run on both sites.
Foundry
Extrusion Presses
Finishing
Plant
Dornach (SMD)
3 Facilities
4 Presses
Drawing Machine
Rolling Mills
Plant
Reconvilier (SMB)
5 Facilities
2 Presses
2 Drawing
machines
Figure 4: Operational Footprint before the Restructuring
"The Alternative Concept"
The team assesses another option: concentrating Swissmetal's foundries in Reconvilier and presses
in Dornach. Representatives from Reconvilier favor this concept (see Figure 5) and consider it fair.
One location receives the new press, the other the foundry. While this option may be beneficial for
Reconvilier, it has several disadvantages for Swissmetal as a whole and the individual sites in the long
run. Calculations show that transportation costs would increase approximately 40%, from CHF 1.3
million to CHF 2.1 million. Operating the foundry in Reconvilier, then sending products over to
Dornach for their extrusion on a new press, and then sending part of the extruded interim product back
to Reconvilier, while finishing another part in Dornach, appears complex and costly. Plus, the metal
waste (scrap) generated in the extrusion production step would have to be shipped back to Reconvilier
to be utilized again by the foundry (Appendix 5). The option was quickly abandoned, as Swissmetal
needs to exploit synergies between the press and foundry (e.g., the easy recycling of internal scrap).
There is one last argument to build the new foundry and conduct press activities in Dornach: being
aware of the Reconvilier strike in November, 2004, investors oppose the idea that Swissmetal becomes
completely dependent on a Reconvilier central foundry and press center.
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Swissmetal: The Restructuring of 2002‐2009 Foundry
Plant
Dornach (SMD)
Plant
Reconvilier (SMB)
Extrusion Presses
Finishing
New Press
W&B* P&T**
Cold Forming
P&T
Cold Forming
W&B
Foundries
* Wires & Bars
** Profiles & Tubes
Figure 5: Industrial Footprint of the Alternative Concept
The "New Industrial Concept"
Key to this concept are the centralization of all foundry and extrusion press work in Dornach, the
further development of the Reconvilier plant into a leading worldwide finishing center for wires and
bars, and the development of the finishing process in Dornach to produce ultra-high-quality profiles
and tubes (see Figure 6). Cost savings from running only one foundry far outweigh the costs of
transporting the intermediate products from Dornach to Reconvilier. A further integration of other
European plants that seems inevitable in the long run (such as the integration of Busch-Jaeger) will be
easier when all foundry and press activities are concentrated in Dornach. To implement this idea, the
concept proposes an investment of CHF 75 million for the 2006-2010 period. A sum of CHF 40
million shall be invested in the new foundry and extrusion press work in Dornach, CHF 10 million in
the Dornach finishing plant, and CHF 25 million in the Reconvilier finishing plant. These investments
should result in marked modernization, as well as increased efficiency, which should reduce industrial
jobs by 150 (from 750) between 2006 and 2010.
Foundry
Plant
Dornach (SMD)
Foundries
Plant
Reconvilier (SMB)
Extrusion Presses
Finishing
New Press
W&B* P&T**
Cold Forming
P&T
Cold Forming
W&B
* Wires & Bars
** Profiles & Tubes
Figure 6: Industrial Footprint of the New Industrial Concept
The decision process
The "Sputnik" team conducted four off-site workshops to evaluate these alternatives and discussed
preliminary findings after each workshop with the supervisory board (see Figure 7). In September,
2005, after receiving advice from several external production experts, the supervisory board favors the
concentration of all foundry and rolling activities in Dornach. This option offers the greatest cost
saving potential, is less risky, and has the support of all investors.
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Swissmetal: The Restructuring of 2002‐2009 Discussion with
Supervisory Board
Jan
Feb
Mar
Retreat
„Dorint“
Apr
May
Jun
Retreat
“Meisterschwananden“
Jul
Decision in
Supervisory
Board
Aug
Sept
Oct
Retreat „Bad
Schauenburg“
Nov
Dec
Retreat „Rigi“
Retreat
„Widder“
Figure 7: Decision Process of the "New Industrial Concept"
To finalize the decision and prepare for implementation, senior management discussed the new
concept with all 20 plant managers at a two-day workshop held on Rigi Mountain, in the heart of
Switzerland. The concept is agreed to by all participants. After in-depth and emotional discussions, the
representatives from Reconvilier accept the proposed way forward and become involved in deciding
how to implement the planned strategy. All managers, including those from Dornach and Reconvilier,
commit themselves to support Fritz and Martin on implementing the agreed-upon strategy. This
commitment quickly became known within Swissmetal as the “Rigi oath.”
“We knew that a decision in favor of one plant will cause a lot of resistance in the other one.
Thus, we put a lot of effort into the business cases that we used as a basis for our decision. We
wanted to be sure and base our decision on facts. Without focusing our extrusion press in Dornach,
it would have been impossible for us to offer competitive prices.”
Sam V. Furrer
The strike in 2006
Major changes are in store for the organizational structure, such as reducing the overlap of
functions between sites and, in particular, that of executives responsible for both plants. Despite their
involvement in the whole process and their stated commitment, shortly before the concept’s actual
implementation and influenced by local politicians, Reconvilier's management starts to oppose the
strategy by filtering indiscretions into the public domain, which generated rumors. Before Swissmetal
is able to explain the concept to all involved social partners (i.e., the governments of the two cantons
involved and the employees), at agreed-upon dates, the workers’ union UNIA begins an
unprecedented media campaign by publishing media releases, including "No to the dismantling of
Swissmetal “Boillat”! " and "Doubtful strategy and obscure information policy at Swissmetal." UNIA
tries to convey the idea that the closure of the foundry in Reconvilier means the closure of the whole
plant. Opinion leaders from the valley and the ranks of UNIA repeat the technically and economically
unjustified assertion that the plant could not survive without a foundry. As workers in Reconvilier feel
that agreements are not kept and their interests are ignored, they indicate unwillingness to accept a
solution that involves major changes. By opposing Swissmetal's new strategy, local politicians
especially try to benefit from this issue.
“We have to deal with people who do not respect anything and anyone: no promises, no rights,
and no public authorities. We don't believe anything anymore!”
Nicolas Wuillemin, president of the Reconvilier employee committee
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Swissmetal: The Restructuring of 2002‐2009 To end the 2004 strike, Swissmetal and the striking workers signed an agreement, the “Protocole
d’Accord.” Among other concessions, Swissmetal guaranteed to operate the Reconvilier plant, to
invest, and to appoint a plant manager. As Reconvilier's plant manager stepped down in November,
Swissmetal was forced to introduce the new organizational structure, with cross-plant responsibilities,
earlier than planned. While this new structure still included a plant manager for Reconvilier, the
position has less power. Swissmetal invited talks on adapting the existing “Protocole d’Accord,” but
the workers' committee from Reconvilier turned the offer down. Martin contacted all 20 managers
who had decided upon the new industrial concept at the Rigi meeting in October, 2005 and asked for
their impressions about the situation. Although the situation was generally portrayed as being tense,
the managers from Reconvilier denied the risk of a new strike. The next day, January 25, 2006, those
same managers led the Reconvilier workforce to strike.
“A strike is the consequence if promises are not kept, if you don't take your employees seriously,
if you ignore the rights of the workforce, if you override a whole region and political institutions.”
Fabienne Blanc-Kühn, UNIA representative
Shift of power
It is January 26, 2006, one day after the beginning of the strike. Martin is on his way to a meeting
with executives of the German company Busch-Jaeger. The previous evening, he and Fritz
Sauerländer, chairman of the supervisory board, contemplated whether or not to cancel this trip. But
this visit, Martin thinks, might be the solution to the whole problem. He says, “Fritz, we need to go
there! We need to ask whether they are willing to sell their company!” As remote as the chances may
be, Busch-Jaeger would be an ideal second source for Swissmetal's customers usually served by the
striking Reconvilier plant. This meeting was originally planned as a pure courtesy visit after Martin
met one of Busch-Jaeger’s new owners at a social function. The current owners acquired Busch-Jaeger
in 2002 from an insolvency administrator. Busch-Jaeger is similar to the Reconvilier plant and, before
its insolvency, had already been part of Swissmetal Group. The meeting evolves as Martin had hoped,
with the owners indicating their willingness to sell the whole business for a reasonable price. Martin
calls Yvonne to discuss this opportunity. “Prices for copper are skyrocketing! We could try to sell the
copper stock that is still piled in the Reconvilier plant. This might give us a chance to finance the deal
without asking banks for additional funds.”
Meanwhile, Martin and Fritz agree to a mediation process overseen by Rolf Bloch, owner of a
Swiss chocolate company, after the personal intervention of Joseph Deiss, President of the Swiss
Government. However, they seriously doubt whether a mediation process is the right answer to a
strike that they regard as illegal. On the other side, the UNIA trade union representatives Renzo
Ambrosetti and Andre Daguet represent the striking workers.
At the same time, Martin focuses on the acquisition of Busch-Jaeger, as he thinks that this will
bring the current strike to an end and distance Swissmetal from the upheavals in Reconvilier. On
February 9, only 15 days after the initial meeting with Busch-Jaeger, Swissmetal signs the deal and
makes the acquisition public. Swissmetal lays off all executives of the Reconvilier plant and later
replaces them with executives from both Busch-Jaeger and the Dornach plant. While at an impasse
before, the situation fundamentally changes in favor of Swissmetal’s management after the
announcement of the Busch-Jaeger acquisition.
A few days after the announcement, as part of the mediation process, the strike is officially put on
“stand-by” by the workers. Although they return to their jobs at Reconvilier, there is no turning back.
The strike has seriously harmed the Reconvilier plant. Some customers do not want to return to such
an unstable situation, at least not immediately. Swissmetal’s loss of customers represents one third of
Reconvilier’s revenues. Swissmetal lays off 112 workers, more than a third of the workforce.
12
310-260-1
Swissmetal: The Restructuring of 2002‐2009 In June, 2006, after several rounds of negotiations without any substantial progress, Swissmetal
concluded the mediations unilaterally. While UNIA originally tried to use this strike as a marketing
platform, it signals a willingness to end this conflict as silently as possible. Furthermore, a significant
part of the Reconvilier workforce has already been working again for weeks and wishes only for a
return to normal conditions. The strike is at a definitive end.
STRATEGIC REPOSITIONING
Swissmetal has a long-standing global reputation for manufacturing the most advanced precision
copper semi-finished products. Swissmetal sets itself apart from its competition by its ability to
produce over 100 different copper alloys as well as its mastery of complex combinations of
mechanical, physical, and chemical properties and of complex extruded shapes, including thin-wall
hollow profiles and double-hollow profiles. In addition, Swissmetal offers very tight dimensional
tolerances and products that are co-developed with customers. It maintains a technological edge by its
close ties to leading technical universities, such as the ETH in Zurich (the Paul Scherrer Institute) and
the University of Lausanne.
Consolidation
Swissmetal’s strategy of producing high-quality and high-tech products requires technical
superiority and, therefore, offers much higher margins. Only in this market segment is Swissmetal able
to capitalize on its technological advantage and overcome its relative cost disadvantage on the
commodity level. Even with its focus on high-end products, part of Swissmetal’s strategy is to fill the
plants up with lower margin products (Appendix 6). However, as these segments are small-volume
niche markets, they require a consolidation of capacities. Martin and his team know that the market of
copper products in Europe will remain under significant pressure and suffer from overcapacities
(Appendix 3). Many customers in need of copper products have moved or are about to move east,
especially toward Asia, resulting in an overall shrinking market. While the situation is the same for the
high-end producers, there may be more time for them to adjust to this trend.
The specialty copper product market is characterized by many small companies (Appendix 8). Like
Swissmetal, many face problems, since the industry is capital-intensive and increasingly requires a
global sales and distribution network. Only a few of these small niche players are able to produce
high-quality copper alloys and distribute internationally. In order to focus more on specialty products,
industrial consolidation with other high-end product producers should help create a company with
enough critical mass to survive the big changes ahead. Martin is convinced, therefore, that Swissmetal
needs to consolidate with other specialty manufacturers if the opportunity arises. For example, with
the acquisition of the former Avins Industrial Products Corporation in the U.S., Swissmetal is able to
offer not only its own products, but also a wide range of trade products. More important, it strengthens
Swissmetal’s sales organization in the U.S. and in other international markets.
“Given our technological strength, by acquiring other players there is an excellent opportunity
for us to become one of the leading international groups within the copper alloy industry. We need
to have a strong presence in Europe in order to be able to follow our customers to Asia!”
Martin Hellweg
Becoming Supplier of Choice and Geographic Repositioning
Even with a focus on high-end products and despite further consolidation, however, it is Martin’s
deep conviction that this strategy is only buying time for Swissmetal. The company needs to find new
ways to compete and grow over time.
13
310-260-1
Swissmetal: The Restructuring of 2002‐2009 Since its consolidation of operational activities, Swissmetal not only increases its technological
capabilities for improving existing processes and products, but also actively targets industries where
the use of superior materials has a tremendous benefit for their products and their customers.
Swissmetal’s engineers, in close cooperation with clients, develop tailor-made products for the airline,
semiconductor, and power generation industries (e.g., the patented copper alloys NP6 and CN8). The
alloy CN8, used by the airline industry, offers lower friction, high mechanical strength, and excellent
corrosion resistance.
“Today, no commercial aircraft flies without at least some high-tech copper alloy from
Swissmetal.”
Martin Hellweg
In a similar vein, Swissmetal has become a leading supplier of copper semis for power generators,
a market demanding about 3,000 tons of copper products per year. Swissmetal offers wedges for
generator rotors, hollow conductors for transport of electrical current, and bus bars for distribution of
electrical current. It works closely together with manufacturers, such as ABB and Alstrom, in order to
improve the efficiency of their products. A small increase in the efficiency of a turbine, for example,
has a tremendous impact on profitability over its lifetime. This benefit far outweighs the higher price
for Swissmetal’s components. These tailor-made products offer even higher margins and, as the only
supplier, Swissmetal avoids price competition. These small niche markets make the short- to mediumterm survival of companies such as Swissmetal possible.
To combat the further declining copper market in Europe, plans for expanding to Asia are
prepared. First, Swissmetal intends to set up inventories for finished products in India and China.
Later, it will invest in finishing capabilities and extrusion presses. At first, Swissmetal and its partner
will perform only cold-forming activities (i.e., squeezing, bending, drawing, and shearing) by
installing relatively small and mobiles items. A foundry, the biggest investment, will follow if the
other steps are successfully completed. Due to the development of the market for copper alloys and the
financial crisis, plans have thus far not been realized. Investments in hot-forming capabilities will be
made in more favorable economic times.
A much unexpected innovation comes Swissmetal’s way. In December, 2007, Swissmetal’s head
of IT developed a bronze roof tile that collects energy from the environment. The major advantage of
this roof tile, which could be produced by Swissmetal, is that it absorbs energy from the wind, rain,
and sun. This energy is carried through the supply-line system by heat-carrying fluid to the heat pump,
which extracts thermal energy from this fluid. The heat extraction process cools the tiles to below
ambient air temperature. As the tiles become colder than their surroundings, they are ready to absorb
fresh heat again. Extracted heat is stored in a hot water storage tank and energy for water and space
heating is drawn from this tank as required. The instrumentation and control system ensures that the
heat pump is used as efficiently and effectively as possible at all times and that the room temperature
remains comfortable. Another advantage is that this system is almost invisible: high-quality roofing
and façade cladding are either attractive decorative highlights or integrate perfectly into existing or
new roofs and façades, offering the possibility of installing renewable energy solutions where building
restrictions apply (e.g., historic houses).
THE CRISIS OF 2008: CHALLENGES AHEAD
While showing promising results in 2007 and in early 2008, Swissmetal finds itself in rough waters
again. Shortly after the collapse of Lehman Brothers in September, 2008 and the corresponding impact
on the global economy, Swissmetal’s incoming orders declined about 40% (compared to previous
years). For more than a year, the economy suffered as many of Swissmetal's customers had difficulty
financing their business activities. In particular, Swissmetal's credit insurers excluded an increasing
14
310-260-1
Swissmetal: The Restructuring of 2002‐2009 number of customers from their coverage, which led to a significantly reduced cash flow, as factoring
banks did not buy these uninsured claims. Already efficient in many ways, Martin and his
management team decided to react quickly. They halted all investments and hiring of new personnel.
The only exceptions were the new extrusion press that was commissioned earlier in 2008, which
requires further investments, and the renewable energy sector, as Swissmetal must maintain growth
prospects after the crisis. Because of different backlog volumes, Lüdenscheid has worked short-time
since December, 2008, Reconvilier since January, 2009, and Dornach since March, 2009, thus
reducing personnel costs. A further restructuring of central services and sales entailing a layoff of 35
people was implemented in January, 2009, representing a 25% reduction in non-production overhead
personnel. In addition, Swissmetal intensified its cash management by further optimizing its
inventories and monitoring and managing its accounts receivables more closely.
In April, 2009, after six years, Martin leaves Swissmetal. The company may be significantly
restructured, but it is still witnessing an unprecedented global economic downturn with no real end in
sight. In the short term, Swissmetal has to master this major external challenge; over time, the
company must address a fundamental strategic issue. Although it may have bought time by
restructuring over the past years, the central question remains: Is there a future for semi-finished
copper producers in Europe? And if not, what should Swissmetal do?
"My first contract lasted 18 months. My initial task was the financial restructuring. It turned out
to be six years. My job is certainly done now. Swissmetal is fundamentally restructured. There is
nothing a turnaround specialist can do anymore. The key challenge for the next management
generation now is to find new markets for Swissmetal to profitably grow long-term.”
Martin Hellweg
15
310-260-1
Swissmetal: The Restructuring of 2002‐2009 APPENDIX
2009
2008
2007
2006
2005
2004
191,7
17,6
183,2
324,9
22,8
312,7
407,0
26.4
394,3
357,6
198,3
204,8
2003
170,6
343,7
190,4
195,1
162,5
Gross added value sales (plants)*
76,7
113,8
126,1
118,0
103,5
117,7
103,5
Gross margin**
Operating income before depreciation
(EBITDA)
Operating income (EBIT)
Result for the year (EAT)
77,9
126,4
148,5
141,1
109,2
118,4
-18,2
-30,9
-28,5
11,2
-2,4
-6,5
28,6
14,5
11,4
27,6
10,2
4,6
16,0
3,4
3,3
Total assets
Current assets
Fixed assets
Short-term liabilities
Long-term liabilities
Shareholders' equity
183,7
99,5
84,3
57,6
26,9
90,9
200,8
113,8
87,0
53,1
32,6
124,1
236,9
147,8
89,1
52,0
46,8
138,1
219,1
129,3
89,8
57,9
34,9
126,3
2,1
5,6
1,5
12,3
8,1
19,3
126,1
-25%
147,7
-2%
Headcount (annual average in fulltime equivalents)
640
Net debts
37,6
Consolidated group (CHF million)
Gross sales
thereof 3rd party sales
Net sales
Cash flow from operating activities
Capital expenditures
Capital Employed
ROCE
2002
229,2
2001
300,7
2000
327,6
1999
317,6
286,3
311,7
303,7
134,7
170,0
184,4
162,5
100,8
124,6
160,2
175,8
164,5
20,2
8,4
17,7
12,4
1,0
-6,9
2,5
-27,6
-55,5
25,2
9,4
1,5
41,5
25,5
13,7
31,1
162,8
94,8
68,0
22,9
16,5
123,4
162,1
99,1
63,0
27,7
15,9
118,5
144,9
80,7
64,2
73,7
18,5
52,6
145,8
73,8
72,0
66,0
20,3
59,4
226,4
110,6
115,8
58,3
52,9
115,0
244,2
125,6
118,6
71,2
54,8
118,2
244,9
123,4
121,5
59,3
76,1
109,5
33,1
28,4
21,1
15,5
-4,6
11,2
11,2
9,4
18,1
9,0
21,9
17,2
12,9
18,8
22,1
12,4
184,9
8%
161,2
6%
139,9
2%
134,4
6%
71,2
1%
79,8
-35%
693
801
879
768
807
755
1.118
1.224
1.194
1.110
46,6
40,1
34,9
-2,7
3,2
216,5
* Gross added value sales: Gross sales less metal at standard metal costs (production plants)
** Gross margin (for years according to Swiss GAAP FER): Net sales less cost of materials and changes in inventory
Appendix 1: Key Financials
2009
Consolidated group (CHF million)
2008
2007
2006
2005
2004
Inventories
Accounts receivables
Accounts payables
Prepayments
Net Working Capital
53,9
34,7
19,7
0,0
69,0
69,1
34,1
18,4
0,0
84,8
84,5
41,0
26,0
1,0
100,6
68,9
39,3
33,1
0,6
75,8
43,1
36,4
14,3
0,2
65,3
44,9
42,6
16,2
0,1
71,4
2003
27,5
36,3
11,8
1,9
53,8
2002
32,8
31,4
7,5
1,6
58,2
Material Costs
Other Operating Expenses
55,2
22,9
107,5
27,4
245,7
35,6
202,5
12,6
81,2
8,8
76,7
8,2
62,0
7,8
91,9
11,4
91,8
69,2
356,7
334,0
49,9
39,8
234,7
224,6
33,7
38,0
125,5
129,8
56,1
41,8
124,2
109,9
58,1
69,7
193,7
205,3
69,5
79,6
213,6
223,7
61,8
81,5
161,7
181,4
26,5
52,9
130,2
156,5
Days Payable Outstanding (DPO)
Days Sales Outstanding (DSO)
Days Inventory Held (DIH)
Days Working Capital (DWC)
Appendix 2: Working Capital
Demand Copper Alloys
2,5
2,5
2
1,5
Europe
China
in t ('000)
2
in t ('000)
Demand vs. Production in Europe
1,5
1
1
0,5
0,5
0
2000
0
2000
2001
2002
2003
2004
2005
2006
2007
2001
2002
2003
Production
2008
2004
2005
2006
Demand
Source: International Wrought Copper Council (IWCC)
Source: International Wrought Copper Council (IWCC)
Appendix 3: Development of Demand and Production of Copper Alloys
16
2007
2008
3,5
310-260-1
Swissmetal: The Restructuring of 2002‐2009 History of Swissmetal Group
The origins of Swissmetal date back to 1855. At that time, Bueche, Boillat & Cie., a rolling mill
and foundry, was founded in Reconvilier (in the Bernese Jura) in response to the Swiss watch
industry's growing demand for brass to make watch movement plates. Around 600 kilometers north,
in the town of Lüdenscheid, Germany, Heinrich Jaeger founded a similar company in 1879 and
started the manufacturing of small metal parts. In 1896, with the establishment of a rolling mill, the
firm became a semi-finished metal products factory. In that same year, the plant in Dornach began
operations with a foundry and rolling mill, operating under the name Schweizerische Metallwerke
AG Dornach. The overlapping of product ranges led to the formation of a company comprised of the
aforementioned plants in Reconvilier, Dornach, and the Selve plant in Thun (in the Bernese
Oberland). This plant, also founded at the end of the 19th century, had a similar product range, with
an emphasis on rolling. In 1989, the effective reorganization under the Swissmetal brand was
completed, with Boillat specializing in small and medium-sized pressed and drawn parts, Dornach
focusing on medium and large pressed and drawn parts, and Selve concentrating on rolled products.
In 1989, UMS Swiss Metal Works Holding Ltd. was formed. The plants were merged and lost their
legal autonomy. The Group’s main shareholders were now SACT Cossonay Holding SA, ACMV
Vevey Holding SA, and Swiss Bank Corporation. In 1990, the German company Busch-Jaeger
Metallwerke GmbH (originally founded by Heinrich Jaeger) was acquired. This company now
specialized in smaller pressed and drawn products. Around the same time, in 1991, the decision was
taken to close the Selve plant and transfer the capacities to the other two Swiss plants, Dornach and
Reconvilier.
Appendix 4: History of Swissmetal
Foundries
Offcut
andWaste
5.450 to/35 CHF
Extrusion Press
Finishing
Waste*
3.000 to/35 CHF
Raw Material* from Rhine Port Basel
5.960 to/35 CHF
Plant
Dornach
Presses
Chippings of customers
20.100 to/30 CHF
Plant
Reconvilier
Bolts*
36.300 to/20 CHF
Foundries
Cold forming
Profiles & Tubes
Finished
Products
12.000 to
Intermediate products
18.600 to/60 CHF
Wire Casts
1000 to
Cold forming
Wires & Bars
Waste of Wire Casts
500 to
Appendix 5: Transportation Costs of Alternative Concept
17
Finished
Products
16.000 to
310-260-1
Swissmetal: The Restructuring of 2002‐2009 Swissmetal identifies and claims lucrative
niches with customer-specific products, high
value for customer and service level
Drawing on its superior capabilities, Swissmetal focuses
on premium specialty products in selected market
segments
• Consumer Goods
• Automotive & Machine Building
• Electronics & Electrical Engineering
• Industry & Construction
Swissmetal reaches a high utilization with low-end mass
products
Market volume
Appendix 6: Swissmetal’s strategy
Appendix 7: Organizational Chart after Restructuring
18
310-260-1
Swissmetal: The Restructuring of 2002‐2009 Competitors Profiles
ALMAG - AZIENDA LAVORAZIONI METALLUItaly
ALSAFIL
France
BOLIDEN LDM NEDERLAND B.V.
Netherland
BOLIDEN MKM LTD.
UK
BUNTMETALL AMSTETTEN GMBH
Austria
CERRO EXTRUDED METALS LTD.
UK
CERRO MANGANESE BRONZE LTD.
UK
CLAL-MSX
France
DEUTSCHE NICKEL AG
Germany
DIEHL METALL STIFTUNG & CO. KG
Germany
EIP METALS LIMITED
UK
ENZESFELD-CARO METALLWERKE AG
Austria
ETS MAURICE LEGO
France
EUROPA METALLI S.P.A.
Italy
FITCO METAL WORKS S.A.
Greece
FRIEDRICH KEMPER GMBH & CO. KG KUP Germany
FUNDICION Y ACABADOS DEL COBRE, S.ASpain
GEBR. KEMPER GMBH & CO. KG
Germany
GINDRE DUCHAVANY S.A.
France
HALCOR METAL WORKS S.A.
Greece
HIJOS DE JUAN DE GARAY S.A.
Spain
KM EUROPA METAL AG
Germany
KRUPP VDM GMBH
Germany
LE BRONZE INDUSTRIEL
France
METALLI ESTRUSI S.P.A.
Italy
METALLURGICA S. MARCO S.P.A.
Italy
MKM MANSFELDER KUPFER UND MESSIN Germany
NEUMAYER-GES.M.B.H.
Austria
NORDIC BRASS AB
Sweden
OTTO FUCHS METALLWERKE
Germany
OUTOKUMPU COPPER PRODUCTS OY
Finland
OUTOKUMPU PORICOPPER OY
Finland
PENINSULAR DEL LATON S.A.
Spain
PRYMETALL GMBH & CO. KG
Germany
S.A. EREDI GNUTTI METALLI S.P.A.
Italy
SARKUYSAN ELEKTROLITIK BAKIR SANAYTurkey
SIA COPPER, S.A.U.
Spain
SITINDUSTRIE INTERNATIONAL S.R.L.
Italy
TRAFILERIE CARLO GNUTTI SPA
Italy
TRAFILERIE DI LAINATE S.P.A.
Italy
TREFIMETAUX
France
WIELAND-WERKE AG METALLWERKE
Germany
Competitors Bars
BOLIDEN GUSUM AB
CARLO COLOMBO S.P.A.
CSEPEL METALWORKS CORP.
SPECIAL METALS WIGGIN LIMITED
Wettbewerber Tubes
Sweden
Hungary
Hungary
UK
4 European + approx. 20 Asian
Competitors
MESSINGWERK PLETTENBERG HERFELD Germany
METALLROHRZIEHEREI KARL IMHAEUSERGermany
METALLWERK EMIL MUELLER GMBH
Germany
METALLZIEHTECHNIK GUSTAV IMHAEUSEGermany
MUELLER EUROPE LTD.
UK
MUELLER EUROPE S.A.
France
OUTOKUMPU COPPER PRODUCTS AB COSweden
OUTOKUMPU COPPER TUBES, S.A.
Spain
PETERSEIM GMBH & CO. KG METALLWERGermany
STANDARD METALLWERKE GMBH
Germany
THE LAWTON TUBE CO. LTD.
UK
TUBO TECNICO EUROPEO S.L. (TERTUB) Spain
YORKSHIRE COPPER TUBE LTD.
UK
13 European + approx. 10 Asian
Competitors
Competitors Strips
Competitors Wires
AB ELEKTROKOPPAR
Sweden
B. MASON & SONS LTD.
UK
CARL SCHREIBER GMBH
Germany
DRAKA WIRE (PART OF DRAKA UK LTD.) UK
GEBAUER & GRILLER METALLWERK
Austria
LAMINADOS DE ARETXABALETA, S.A.
Spain
LAMINADOS OVIEDO CORDOBA, S.A.
Spain
OUTOKUMPU COPPER STRIP AB
Sweden
OUTOKUMPU COPPER STRIP B.V.
Netherland
PIRELLI CAVI & SISTEMI S.p.A.
Italy
S.A. GRISET
France
SCHLENK METALLFOLIEN GMBH & CO. KGGermany
SCHWERMETALL HALBZEUGWERK GMBHGermany
STOLBERGER METALLWERKE GMBH & COGermany
SUNDWIGER MESSINGWERK GMBH & CO Germany
WIELAND-WERKE AG WERK VELBERT
Germany
WIELAND-WERKE AG WERK VILLINGEN Germany
ATLANTIC COPPER S.A.
Spain
BERKENHOFF GMBH
Germany
CUPROFIL
France
ELBAK ELEKTROLITIK BAKIR SAN VE TICATurkey
ER-BAKIR ELEKTROLITIK BAKIR MAMULLETurkey
FULGOR GREEK ELECTRIC CABLES S.A. Greece
GENERAL CABLES S.A.
Greece
HELLENIC CABLES S.A.
Greece
NEXANS HELLAS S.A.
Greece
NEXANS WIRES
France
PIRELLI CABLES (2000) LTD
UK
PIRELLI CABLES ET SYSTEMS SA
France
PIRELLI CABLES LTD - ROD ROLLERS UNI UK
RBG ELCOND SA
Romania
SOCIETE DE COULEE CONTINUE DE CUIVFrance
SOCIETE LENSOISE DU CUIVRE
France
SUMERBAKIR SANAYII VE TICARET A.S. Turkey
TELECABLES S.A.
Greece
TREFILERIES ET LAMINOIRS DE LA MEDITFrance
UMICORE
Belgium
UMICORE ITALIA S.R.L.
Italy
17 European + approx. 8 Asian
Competitors
21 European + approx. 10 Asian
competitors
42 European
+ approx. 4 Asian Competitors
Appendix 8: Companies active in the Copper-Alloy Market in Europe
19
20
31.1.2006
31.1.2006
1.2.2006
8.2.2006
23.1.2005
25.1.2006
27.1.2006
14.12.2005
13.12.2005
12.12.2005
18.11.2005
6.12.2005
15.11.2005
14.11.2005
9.11.2005
11.11.2005
8.11.2005
25.10.2005
6.9.2005
25.11.2004
8.7.2005
24.11.2004
19.11.2004
21.11.2004
18.11.2004
16.11.2004
Swissmetal proposes a roundtable discussion
Swissmetal regrets UNIA’s attitude toward round table
Sudden stoppage in Reconvilier
Swissmetal calls for settlement of the stoppage and does not
negotiate with the striking workers – conclusion of the GAV
consultation process with the Dornach Employee’s Committee
Swissmetal meets Pierre Kohler and Maxime Zuber
Swissmetal starts a dialogue with the cantonal governments and
politicians
Important step toward integration of the Swiss plants –
formation of industrial competence centers
Swissmetal plans annual savings of around CHF 14 million with
new industrial concept
Swissmetal: Committed to both its Swiss plants
Swissmetal stands by the Reconvilier plant
Swissmetal appoints the internal candidate Patrick Rebstein as
Plant Manager for the Swissmetal Boillat plant in Reconvilier
Swissmetal celebrates the 150th anniversary of its oldest plant,
“La Boillat,” in Reconvilier, with a celebratory ceremony in the
presence of Government Adviser Elisabeth Zölch-Balme
Supervisory Board is checking every possibility of guaranteeing
the interests of Swissmetal
Swissmetal media communication: Stoppage at Swissmetal –
Reconvilier plant
Swissmetal media communication
Change of management at Swissmetal leads to stoppage
Manifestation of solidarity for the striking workers in
Reconvilier
Swissmetal: UNIA condemns the dismissal of Nicolas
Wuillemin
UNIA demands clear guarantees from Swissmetal
regarding investment and cancellation of the proposed job
losses
Boillat workforce refuses to amend agreement concluded
a year ago
Swissmetal breaches the terms of the GAV
Swissmetal’s workforce in Reconvilier goes on strike
Swissmetal provokes escalation of the conflict and
engages the whole region
Doubtful strategy and obscure information policy at
Swissmetal
Swissmetal bosses are playing poker with concessions to
retract their plans
Campaign of solidarity by the Swissmetal Boillat
employees
Resolution by the National Industrial Conference of the
UNIA Trade Union: No to the dismantling of Swissmetal
“Boillat
A strategy is needed for the growth of two production
plants
Success for the striking Swissmetal employees
Negotiations will start tomorrow
Negotiations break down without a result
UNIA media communication
Plant Manager (Industry) dismissed at Swissmetal Boillat
plant in Reconvilier
and
Restructuring
Swissmetal: Call to talks
Discussions between Swissmetal and a representative
from the cantonal government (Regierungsrat)
s
Swissmetal:
Strategy
measures8.11.2005
Swissmetal in Reconvilier: Agreement between
Supervisory Board and employee representatives
Canton of Berne media communication
310-260-1
21
28.4.2006
25.4.2006
4.4.2006
30.3.2006
25.3.2006
24.3.2006
15.3.2006
23.2.2006
24.2.2006
8.3.2006
21.2.2006
14.2.2006
15.2.2006
16.2.2006
Swissmetal reduces the number of layoffs at Reconvilier by 30
jobs
Satisfactory 2005 results in a low in the sector – economy has
been growing again since the beginning of 2006 – progress in
the strategic growth of Swissmetal – Critical situation in
Reconvilier continues
UNIA is attempting to interfere with corporate decisions and is
endangering the Reconvilier plant with its recommendations to
sell it
30% of customers lost by the strike at the Reconvilier plant –
112 layoffs unavoidable – Swissmetal wants to retain plant and
remaining jobs.
Swissmetal’s supervisory board approves common draft for
mediation
Hopeful result
Preparatory work started today
•
Swissmetal offers open talks about the prospects of
integration in Reconvilier
•
False assessment by UNIA – correction
9.2.2006
10.2.2006
Acceptance of talks
The Dornach Employee’s Committee takes a stand (by
Employment Committee)
2.2.2006
3.2.2006
Swissmetal media communication
•
Stop these industrial cutbacks. “La Boillat
vivra!”
•
Movement in the mediation process with the
Swissmetal conflict
First step toward normalization of the Reconvilier plant
The UNIA delegates set an important course for the next
few years.
Swissmetal: Artists’ support brings in around 60,00 francs
Musical solidarity with the Swissmetal workforce in
Reconvilier
Artists support the Swissmetal Boillat employees in
Reconvilier
UNIA criticizes layoffs as irresponsible and demands the
speedy break-up of Reconvilier
•
Open talks with Bundesrat Joseph Deiss about
a solution to the Swissmetal conflict
•
Swissmetal sabotages Bundesrat mediation
•
Demonstration in front of Swissmetal gates in
Dornach
Employees agree to mediator Bloch’s proposals
UNIA meets Swissmetal customers
•
Customers are seriously disappointed by
Swissmetal
•
Why does Hellweg want to asset-strip
Reconvilier
•
Swissmetal drove Boillat to strike
Bloch’s proposal is currently being revised by Swissmetal
senior management
Strikers in Reconvilier agree to mediator Bloch’s proposal
Unbelievable irresponsibility by the Swissmetal senior
management
Acceptance of talks
UNIA welcomes Swissmetal’s willingness to hold talks
UNIA media communication
The Canton of Berne regrets the layoffs but hopes to
save the plant
Bundesrat Joseph Deiss appoints Rolf Bloch as
mediator in the Swissmetal Reconvilier conflict
Canton of Berne media communication
Swissmetal: The Restructuring of 2002‐2009 310-260-1
27.6.
16.6.2006
13.6.2006
15.6.2006
17.5.2006
technical
expert’s
The final furlong at Boillat:
Industrial expert confirms UNIA’s criticism – his
proposals will be immediately put in place
UNIA media communication
Appendix 9: Overview over Media Communication
Mediation process ends: Swissmetal puts in place the findings
of the mediation process in Reconvilier and offers to cooperate
with the social partners
Swissmetal puts in place the
recommendations despite resistance
Swissmetal media communication
UNIA fuels the conflict in Reconvilier with indefensible
polemics
Swissmetal: The economic director supports the
mediation process
Canton of Berne media communication
Swissmetal: The Restructuring of 2002‐2009 310-260-1
22