Pirelli Planning Job Cuts and Plant Idling, says Union

Job cuts are said to be a possibility at Pirelli & C. SpA. According to Italian labour union Filcem, whose comments have been published by Bloomberg, the company will eliminate approximately 200 administrative jobs in Milan and will probably continue to idle plants to counter a global drop in demand.

Milan-based Pirelli has begun procedures to lay off 130 people at its tyre unit and about 60 in the real estate division, said Filcem spokesman Gianmario Mocera. The company increased state-subsidised temporary layoffs at factories in Bollate and near Turin during October and has been halting production for 10 days a month, he added. Further cutbacks are apparently being pencilled in on next year’s Pirelli calendar, which coincidentally is due for release the same week as the job losses were reported.

“The job cuts are part of announced cost-reduction measures to weather the global financial crisis,” reports Bloomberg, citing a Pirelli e-mail as the source. Chairman Marco Tronchetti Provera stated on November 7 that the company plans to trim production and the workforce in Europe through next year, reducing costs 10 per cent by the first quarter.

Like vehicle manufacturers, tyre makers face thinner earnings as car and truck markets are in decline and falling raw- material costs have yet to be realised. “With forecasts of a 10 to 15 per cent output cut for the automotive industry, these measure are likely to continue in 2009,” Mocera said. Filcem has encouraged workers to protest the layoffs on November 25.