FLSmidth fallout hits Valley. 115 job...

FLSmidth fallout hits Valley. 115 jobs will be lost locally

There are 18 comments on the The Morning Call story from Jan 30, 2009, titled FLSmidth fallout hits Valley. 115 jobs will be lost locally. In it, The Morning Call reports that:

FLSmidth Inc. in Bethlehem has eliminated 115 jobs, or nearly 12 percent of its local work force of 1,000 people, the company announced Thursday.

Join the discussion below, or Read more at The Morning Call.

We Were Duped

Allentown, PA

#1 Jan 30, 2009
So according to Christian Jepsen, president & CEO of FLSmidth, who said, "our cement customers reduced their investments several months ago" as being one of the reasons for the layoffs. You would have never gotten that from his speech at the company Christmas dinner dance last December.

Let's not kid ourselves. These layoffs have everything to do with outsourcing as much as possible to India. Why weren't other measures taken to cut/reduce/control costs? If this was known several months ago, why not cancel the Christmas dinner, why give out $25 gift cards to all employees at Thanksgiving, why not consider a shortened work week if it was feasible, why not cancel any future company summer picnic, why not roll back wages to the last wage increase, why not ask for a redcution in PTO days, why not halt (at least temporarily) the company matching contribution to the 401(k) plan, why not stop cafeteria catering for employee meetings. I came up with these cost saving measures in less than 5 minutes. These or a combination of several of these could not have been considered? The only problem I see with implementing these measures is that you still have employees, something I think the company was hell bent on eliminating, other cost cutting measures be damned.

As mentioned by the above list, one can see that FLSmidth was generous to it's employees. For that generosity the employees took the company to being #1 in it's field. So it's a two-way street. What is management doing, other than laying off employees, to set examples of their cost cutting measures? Are any mangement positions being eliminated? Does management have an agenda to eventually shut down the headquarters building?

Many good employees were let go yesterday, some with quite a few years invested in the company. I hope you can pick yourselves up, dust yourselves off and remember you won't be forgotten.
The Truth

United States

#2 Jan 30, 2009
Danish Trade, Ministry of Foreign Affairs, India has created a new service, Engineering Services, which will assist Danish companies to find the right engineering workforce in India.
One of the Danish companies are already benefiting from Indian engineers' skills are FLSmidth. The group that develops and supplies of cement factories and mineral industries, currently employs a total of 1,800 employees in India.It is there in the cement division hired 550 engineers and 450 technicians.
- Cement Division in India carries 100 percent sales and liquidation of projects in India and about 50 percent of the engineering work on all global FLSmidth projects. I do not see some limitations in types of tasks that can be solved in India and there is no difference in the quality of jobs done in India or Ireland, if you ensure proper training of its employees. I think generally that all Danish companies could usefully be put to work in India, says Anders Bech, CEO of FLSmidth in India.
Wage increases in India and there has been more regulation of the highly qualified staff. But FLSmidth offers no worries about the future in India.
- We have not problems with the recruitment of engineers. That is true that salaries in India is growing relatively more than in Denmark. But we must remember that there is a factor of between 6 and 10 of the difference between an Indian and a Danish engineer's salary. Will a Danish engineer of 4 percent pay increase, will pay between 24 and 40 percent more in wages in India and still retain the same absolute savings in labor.
One That Got The Ax

Allentown, PA

#3 Jan 30, 2009
We Were Duped wrote:
So according to Christian Jepsen, president & CEO of FLSmidth, who said, "our cement customers reduced their investments several months ago" as being one of the reasons for the layoffs. You would have never gotten that from his speech at the company Christmas dinner dance last December.
Let's not kid ourselves. These layoffs have everything to do with outsourcing as much as possible to India. Why weren't other measures taken to cut/reduce/control costs? If this was known several months ago, why not cancel the Christmas dinner, why give out $25 gift cards to all employees at Thanksgiving, why not consider a shortened work week if it was feasible, why not cancel any future company summer picnic, why not roll back wages to the last wage increase, why not ask for a redcution in PTO days, why not halt (at least temporarily) the company matching contribution to the 401(k) plan, why not stop cafeteria catering for employee meetings. I came up with these cost saving measures in less than 5 minutes. These or a combination of several of these could not have been considered? The only problem I see with implementing these measures is that you still have employees, something I think the company was hell bent on eliminating, other cost cutting measures be damned.
As mentioned by the above list, one can see that FLSmidth was generous to it's employees. For that generosity the employees took the company to being #1 in it's field. So it's a two-way street. What is management doing, other than laying off employees, to set examples of their cost cutting measures? Are any mangement positions being eliminated? Does management have an agenda to eventually shut down the headquarters building?
Many good employees were let go yesterday, some with quite a few years invested in the company. I hope you can pick yourselves up, dust yourselves off and remember you won't be forgotten.
I agree with much of this posting but let me add a couple more things. Not only did the employees take this company to #1 in it's field, FLSmidth became #1 in it's field in the world.

Certainly, employees would have welcomed many of the cost cutting measures mentioned if it meant that we would keep our employment but as the poster mentioned, I ,too, believe that management had blinders on and looked no further than layoffs because I think they have a further agenda down the line. To the other 114 employees who were let go, I say be assured that you weren't let go because of your performance. We are all just numbers when it comes down to it.
a reader

United States

#4 Jan 30, 2009
One That Got The Ax wrote:
<quoted text>I agree with much of this posting but let me add a couple more things. Not only did the employees take this company to #1 in it's field, FLSmidth became #1 in it's field in the world.
Certainly, employees would have welcomed many of the cost cutting measures mentioned if it meant that we would keep our employment but as the poster mentioned, I ,too, believe that management had blinders on and looked no further than layoffs because I think they have a further agenda down the line. To the other 114 employees who were let go, I say be assured that you weren't let go because of your performance. We are all just numbers when it comes down to it.
In the end you are right, corporate employees are numbers and nothing more. This is why after being laid off over 6 yrs ago from a large prominent Lehigh Valley company I have never gone back to corporate America. I work for a very small office, I am a person here and love my job. Yes, I lack the glitzy benefit package of a large company but I don't miss being just a number in the corporate political jungle.

I know it's a rough economy but there is hope out there and you may find happiness in the least expected spot.
Claire

Allentown, PA

#5 Jan 30, 2009
Companies, public or private, ALWAYS bite the hand that feeds them.
Staberdearth

Allentown, PA

#6 Jan 30, 2009
We Were Duped wrote:
So according to Christian Jepsen, president & CEO of FLSmidth, who said, "our cement customers reduced their investments several months ago" as being one of the reasons for the layoffs. You would have never gotten that from his speech at the company Christmas dinner dance last December.
Those types of speeches should not be taken to heart, they are to set the tone of the moment while the guy in charge delivering it strokes himself onstage. I do not think I have ever heard any speech delivered in a party or team building environment that wasn't all slickly delivered and meaningless feel good bullschitte!

There have been a few campaign speeches delivered that way in the recent past that will eventually have to be delivered upon...if you remember what palaver was promised nahhh! It was just a campaign speech..to get your vote. Feeling duped yet?
comment

Korea

#7 Jan 30, 2009
Buy the company stock. It obviously doing a lot right to become #1 in the field. There is talent and markets for services globally.

Looks like Elmer Gates is laughing all the way to the bank. Bought it, sold it, retired and now lives the life of a country gentlemen living off US Treasury Bond income of about $5 million per year.
janie get your gun

Allentown, PA

#9 Jan 31, 2009
To "I got Cut"...
Many large companies in the area have taken the same approach to hire "cheap engineering labor". However, as you probably know from working with them, maybe 1% of them can actually do anything. Most couldn't engineer their way out of a cardboard box. I am with you in the belief that these companies will fail when the chickens come to roost with their bad designs and engineering ability.
I was not fired but I felt it was time to leave a large company in the valley due to this management approach. I now work for a small engineering firm in the cement industry. We may not have the large jobs right now, but we're still busy enough.
Uncounted

United States

#11 Jan 31, 2009
Not counted in the 115 laid off at FL Smidth is the very large number of technical and professional contract workers and consultants hired to supplement the direct employees. These workers were let go right before Thanksgiving & Christmas. Huge profits was gained from not having to pay for benefits for these workers, not to mention from the expertise these people provided.

FL Smidth takes its profits to Europe and jobs to India. It has seen the global economic downturn as an opportunity to accelerate its plan to devalue the operations in the Lehigh Valley and throughout North America.

This was just the beginning.
coldhouse

Allentown, PA

#12 Feb 1, 2009
The layoffs at the Bethlehem office is great illustration of the difference between management and leadership.
FLS managed the economic downturn by reducing headcount. Any allusion to vision forward or innovation (or anything associated with leadership) was nowhere to be found last week. I’ll admit they showed an effort by combining minerals and cement engineering to allow for better reaction to market conditions. In the end, this action was little more than moving some offices and names on an organization chart. Moving people between projects is always an option - Beyond that, they threw their hands in the air and gave up.

The next release to the stockholders won’t read anything like the following:
We have just reduced the workforce in the most flexible and innovative office in the company. Our plan now is to play the waiting game for markets to rebound, but when it does, we will be ready with an army of mostly trained Indian engineers and designers, and plenty of pretty good vendors and fabricators. We would have liked to remain industry leaders for years to come, but for now, we will use the slow market to ramp up our Indian office, and scrap bad casting and fabrications. We should be back to where we were two years ago in about 2012.
enough rocks

Allentown, PA

#13 Feb 1, 2009
To be fair, the Indian employees are not bad, but they are just technicians. There is a lot of history and even nuance used in designing and building for heavy industry - It can’t be scooped out of one office and dumped into another. I can think of dozens of lessons that cost FLS dearly to learn, and I am certain they will be repeated in the near future.
coldhouse

Allentown, PA

#14 Feb 20, 2009
I love the post I made on Feb 1st... What do you think Bill?
True American

Allentown, PA

#15 Feb 20, 2009
coldhouse wrote:
We would have liked to remain industry leaders for years to come, but for now, we will use the slow market to ramp up our Indian office, and scrap bad casting and fabrications. We should be back to where we were two years ago in about 2012.
If FLS continues to rely on India, they will be Chapter 7 by 2012.
S in LV

United States

#16 Feb 21, 2009
A hearty thank you to the 115+ for this:

EARNINGS POLL-FLSmidth FY 2008 EBIT seen up 32.2 pct
Fri, 20 Feb 2009 15:44:04 UTC

FLSMIDTH/(EARNINGS POLL)

* FLSmidth full-year 2008 results
* EBIT seen rising 32.2 percent

COPENHAGEN, Feb 20 (Reuters)- Danish engineering group FLSmidth is expected to post a 32.2 percent rise in full-year 2008 operating profit, a Reuters survey showed on Friday.

The average forecast in the survey of eight analysts was for earnings before interest and tax (EBIT) of 2.41 billion Danish crowns ($406.7 million), compared with 1.82 billion crowns in 2007.

"FLSmidth's progress was due of their large amounts of orders," said Jyske Bank analyst Lars Terp Poulsen. "They have a lagged effect from the financial crisis. This will show itself in their amount of orders, which is falling rapidly." Revenue is forecast to rise 28.8 percent to 25.71 billion crowns from 19.97 billion crowns.

EBIT in the mineral sector was seen surging 83 percent to 1.01 billion crowns and EBIT in the cement sector was expected to rise 25 percent to 1.36 million crowns.

Last month, the group said it would reduce staff levels by 600 employees because the economic slump has meant declining investment levels in both the cement and minerals industries.

Of the seven analysts who disclosed their rating of the company's shares, five were positive and two were negative.

The company has forecast 2008 EBIT in the range of 2.4-2.5 billion crowns with sales of about 26 billion crowns.

Full-year figures include minus 65 million crowns reported at EBIT level also due to price allocation and costs related to the acquisition of GL&V.

http://www.forexyard.com/reuters/popup_reuter... #
Again

Nigeria

#17 May 29, 2009
Just when you thought the layoffs were over. Here we go again
AndAgain

United States

#18 Sep 16, 2010
and again... today 17 more. Soon there will only be echo's. Sad company indeed
Unreal

Rome, GA

#19 Sep 25, 2010
AndAgain wrote:
and again... today 17 more. Soon there will only be echo's. Sad company indeed
Yet another sad day for some more people. FLS leadership and managers somehow never make the cuts.
Arturo Garibaldi

New Windsor, NY

#20 Sep 25, 2010
Becoming unemployed is one of the most horrible experiences possible.

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