Pace already outsources 75% of its manufacturing production and the proposal to outsource the remaining 25% would result in the likely loss of 470 manufacturing and related jobs in the Group’s Saltaire facility in Yorkshire, UK. The Group enters into the statutory 90-day consultation period today. The Board believes that taking these steps will improve product costing and maintain Pace’s competitiveness in its world-wide markets.
The site at Saltaire will continue to expand as Pace’s largest centre of high technology engineering and innovation. In the past 12 months 110 new software engineers, electronics designers and development staff have been recruited to Saltaire, bringing the total non-manufacturing employees there to 670. The Group expects over the next year to build on these numbers by creating a further 150 engineering positions in its locations across the world, 80 of which will be in Saltaire.
Subject to the consultation process, the cost of restructuring is expected to amount to GBP4.5 million, to cover possible production equipment write-off and redundancy payments. This charge will be taken as an exceptional item in the financial period that closes on 2nd June 2001.
The Board remains confident for the future and in particular anticipates that the Group will meet market expectations for the financial year ending 2nd June 2001, save for this exceptional item.
