AGC Glass Europe announced on January 12th 2021 to the Works Council of Seneffe plant (Belgium) its intention to reduce the production capacity and the fixed costs of the Transport & Industrial Vehicles (TIV) activity.
This plan aims to recover the TIV business profitability and to sustain the activity in Seneffe. A collective dismissal is considered to decrease staff with 47 collaborators out of a total amount of 210 persons working in the plant.
The activity Transport & Industrial Vehicles (TIV) of AGC Glass Europe located in Seneffe (Belgium) is specialized in the railway market. This part of the Seneffe plant suffers since numerous years of insufficient industrial performances leading to structural financial losses for the TIV activity of AGC. In 2019, the increase of production volume allowed to generate a first positive financial result. However, the year 2020 faced a sudden and major turnaround for the TIV activity of the plant, leading to a market decrease on the mid-term.
The impact of the Coronavirus
The global spread of the Covid-19 virus is leading to a strong decrease of the TIV markets for its Original Equipment Manufacturing and its After-Market. Rolling Stock manufacturers are suffering from slowdown of production chain coming from a crisis with multiple aspects (sanitary crisis, supply chain crisis, etc…). Train fleet operators are decreasing drastically the number of vehicles in service, as well as their maintenance in order to limit their operating costs. The decision makers for investment in railway fleet are taking decisions to postpone or even cancel some acquisitions in order to keep the cash necessary for other purposes.
The impact of a structural crisis
Furthermore, independently from the Covid-19 virus, the main European train fleet operators tend to reduce their orders for glazing for replacement. Some major European train operators suffered losses of income, forcing them to implement persistent cost reduction programs.
With the aim to accelerate its energetic transition, the European Union announced 2021 as the European Year of Rail, promoting transport by railway. If this shift towards a sustainable and smart mobility is confirmed, the manufacturing and the revamping of trains should increase in 2022 & 2023, leading to an increase in glazing demand as from 2024.
Reorganize to sustain
In order to resist to such TIV market shrink until the recovery hoped for in 2024, AGC Glass Europe is in vital need to reduce its production capacity in Seneffe and to decrease its fixed costs by different means for the TIV activity. The purpose is to limit the TIV financial losses and its impact on the financial results of the group.
The Seneffe plant employs 210 people and plans to reduce its workforce by 47 people. A social plan, as well as the accompanying measures, will be studied with the various partners concerned.