Restructuring and job cuts at Hydro aluminium plants

The Norway Post, 8 May 2004

Norsk Hydro has announced an extensive restructuring programme for its Norwegian aluminium plants. Annual operating costs will be reduced by NOK 350—400 million, with production remaining at the present level.

This will result in workforce reductions of up to 800 man-years, according to a Norsk Hydro press release.

The restructuring process will be completed early next year.

Hydro's board decided Friday to submit the restructuring programme for final approval in Hydro's corporate assembly.

The employee representatives emphasized that they agree on the need for restructuring but that they do not agree on the de-manning figure presented.

Hydro is one of the three leading aluminium companies in the world, with considerable production capacity in Norway. However, the Norwegian aluminium plants have been through a period with weak financial results in recent years.

Aluminium production in Norway is a focus area for Hydro, and we will do everything we can to ensure that the Norwegian operations remain competitive in the international arena, says President and CEO Eivind Reiten (photo). However comparisons with both international and other Norwegian metal plants show that productivity is too low in our plants. The measures we now implement are absolutely necessary to safeguard the basis for continued profitable operations of the aluminium plants in Høyanger, Årdal, Karmøy and Sunndalsøra.

Around 3,400 people are employed in Hydro's metal production in Norway today. The cost reductions will affect all Hydro's metal production sites in Norway. Manning will be reduced by around 20-25 percent.

In addition, manning reductions have to be carried out in Høyanger and Årdal by the end of 2006, due to the phasing out of the oldest lines in order to comply with international requirements.

Hydro hopes to be able to find new jobs for a certain number of the redundant employees either in Hydro or in new opportunities arising from the business developments that are underway, mainly in Høyanger and Årdal.

The restructuring work will begin immediately and shall be completed by 1 April 2005.

The changes will be implemented without reducing production, or lowering our stringent requirements for health, safety and environment. We will endeavour to ensure that as many people as possible find alternative work, and that the manning reduction is realized as far as possible through voluntary agreements. However we cannot guarantee that there will be no dismissals, says President and CEO Reiten.

Hydro produced 1,473,000 tonnes of primary aluminium in 2003, of which 850,000 tonnes were produced in Norway. This represents an increase of 200,000 tonnes from 1993.

Hydro is a leading energy and aluminium company with operations in more than 40 countries. Hydro is one of the world's leading offshore producers of oil and gas, and the third largest supplier of aluminium. A total of 36,000 employees create value through developing products that benefit customers and local communities all over the world.

Rolleiv Solholm