Wärtsilä says it plans to ramp down engine manufacturing in Trieste, Italy, and to centralize its European four-stroke engine manufacturing in Vaasa, Finland. While the Trieste site (once home of Grande Motori Trieste) will continue to be used for R&D, training and other activity, ending manufacturing there is expected to impact approximately 450 employees with potential redundancy. The estimated full annual cost savings will be approximately EUR 35 million by 2025. Wärtsilä says “the associated transformation costs are expected to be approximately EUR 130 million, out of which the cash flow impact is approximately EUR 75 MEUR.” (Exchange rates being what they are, all those Euro numbers are the same in dollars today).
The discussions between Wärtsilä, employee representatives and with Italian authorities and institutions will start in compliance with Italian legislation.
“It is a part of our strategy to continuously monitor our manufacturing capacity and footprint to ensure that our operational efficiency remains competitive,” says Håkan Agnevall, president and CEO of Wärtsilä. “Over the years we have continuously consolidated our manufacturing footprint in Europe. With our new European manufacturing footprint, we are taking the next step in strengthening our competitiveness and creating a structure enabled for future growth. Italy and Trieste will continue to be very important for Wärtsilä in many areas as we aim to be part of shaping the decarbonization of marine and energy industries.”
FUTURE INVESTMENTS IN TRIESTE?
“Under the challenging circumstances of the past years, our employees in Trieste have done a commendable job,” said Roger Holm, president of Wärtsilä’s Marine Power business. “However, we need to centralize our engine manufacturing footprint in Europe to further improve our competitiveness. I would like to underline that Italy and Trieste will remain very important for Wärtsilä. Going forward our site in Trieste will focus on R&D, sales, project management, sourcing, service and training activities. A main part of our employees in Trieste are engaged in these activities today. In the development of the future sustainable solutions for marine and energy industries we are investigating possibilities for future investments in Trieste related to the development of technology for sustainable fuels.”
The planned changes now planned will not impact Wärtsilä’s engine portfolio and the company says that service levels and commitment towards customers will remain intact. “The supply chain will remain largely as-is today, including our Italian suppliers, ensuring that we maintain the competitiveness of our supply chain,” it adds.