KION Group plans to cease production at Linde Material Handling in Basingstoke as part of consolidation initiative

Dramatic downturn in industrial truck sector makes reduction of manufacturing footprint inevitable. The Proposed transfer of production could potentially result in a cutback of about 350 jobs at the Basingstoke plant. Linde and its parent company KION remain fully committed to UK market with more than 2100 Group employees in the UK.

In the light of the global recession and a 50 per cent downturn of the global market for material handling equipment the KION Group, one of two leading global manufacturers of forklift trucks and material handling technology and equipment, is working on plans to reduce the number of manufacturing plants across Europe. The consolidation plan aims to transfer lower production volumes to larger factories and is intended to secure the long term competitiveness of the company by adapting current significant manufacturing over-capacities to a fundamentally changed business environment. Part of this plan proposes the transfer of manufacturing and engineering activities from the Linde manufacturing site in Basingstoke to larger plants in Europe over the next 12 months.

Linde assumes that the intended transfer will result in the reduction of 350 jobs at the Basingtoke site that currently employs 550 people. Activities, such as Sales & Marketing, Aftersales and Administration will remain in the Basingstoke area. Further details are still subject to consultation with unions and employees.

"We have thoroughly examined all alternatives to a cessation of production in Basingstoke. However, we concluded that all other product transfer options would not be feasible. For economic reasons, as a result of the dramatic market deterioration, the high fragmentation of production in relatively small plants necessitates a concentration on major sites. Much to our regret, the relocation of the reach trucks, counter-balance trucks and tractor product lines to larger factories is inevitable," said Kerry McDonagh, Chief Executive of Linde Material Handling (UK) Ltd.

The KION Group's intention to take such strong measures to consolidate production capacity results from a dramatic downturn the industrial truck sector is experiencing in the course of the global financial and economic crisis. The global market for fork-lift trucks almost halved in the first few months of 2009, following a decline of more than eight per cent last year. For 2009 as a whole, the global market is expected to contract by 45 per cent compared to 2008.

"The severity of the global economic crisis is exceeding all expectations and we believe that the first signs of recovery will not be seen before 2010 at the earliest. These unforeseen, far-reaching changes to the market will - despite our strong market position and recent market share gains - continue to affect our business into the next decade and thus require decisive, forward-looking action," said Gordon Riske, Chief Executive Officer of KION Group. "In order to strengthen the global competitiveness of our brands and secure the long term future of our company, we have to adapt our capacities to the new economic reality."

Despite the intended consolidation measures, Linde and its parent company KION remain fully committed to the important UK market. With approximately 1,500 employees in sales, service and support functions at 23 sites, Linde remains the leading material handling company in the UK. The Linde factory in Merthyr Tydfil producing heavy and container trucks for the global market will stay an important core manufacturing site for the company. On a Group level some 1750 people will continue to serve customers of the KION brands in the UK.

The planned optimisation of Linde's production footprint will have no effect on the company's business partnerships with its customers. All products will remain available and will maintain the same high standards in quality, delivery, performance and value. Furthermore, Linde will consult with its suppliers in order to minimise the impact of the transfer plans on their business.

Linde Material Handling provides high-quality material handling products and is a leader of technology and innovation. With innovative vehicles and services, Linde offers not only technologically sophisticated solutions that enhance cost effectiveness, outstanding design and leading-edge hydraulic components; it also delivers all-round expertise in customer service. Linde Material Handling achieves annual sales of some Euro 2.6 billion and employs approximately 12,500 employees all around the world and plans to expand further, especially in growing markets such as the USA and Asia. The headquarters of Linde Material Handling and its biggest production plant are based in Aschaffenburg, Germany, where the roots of the business lie. Production facilities outside Germany currently include Châtellerault, France; Basingstoke and Merthyr Tydfil, Great Britain; Summerville, South Carolina, USA; and Xiamen, China. Linde Material Handling is a KION Group company.

With some 550 employees and a turnover in 2008 of some £ 431 million Linde Material Handling (UK) Ltd is the leading material handling company with a unique domestic sales & service network. Furthermore, the heavy truck division of Linde is headquartered in Merthyr Tydfil, where all heavy and container trucks for the global markets are being developed and manufactured. A summary of current UK KION employees is as follows: Linde Basingstoke employees 550. Linde Merthyr Tydfil 280, over 1000 employees in the sales and service network and over 260 other KION Group employees. Total number of KION UK employees currently is over 2100.

The KION Group, with its Linde, STILL, OM and Baoli brands, is the market leader in material handling products in Europe and the global number two in the industry. The KION Group employed over 21,000 people and generated revenue of around €4.6 billion in the 2008 financial year