Terex cuts 5,000 jobs as profit slumps

Terex has reported a net loss of almost £300m in the fourth quarter of 2008 leaving the company with a full-year profit of £50m compared with £432m for 2007.

Most of the third quarter losses were due to writing off goodwill, but the company also suffered a 20% decline in sales. While its cranes and mining businesses held up well throughout 2008, its other products (access equipment, materials processing, and construction machines) suffered badly in the second half of the year.

Chairman and chief executive Ron DeFeo expects 2009 sales to be 30% to 35% lower than in 2008 and the company is in the process of cutting 5,000 jobs.

The workforce in its Aerial Work Platform business is being reduced by 41% while more than one in five jobs in its materials processing division (crushing and screening) is being cut. Around 18% of the workforce at its roadbuilding equipment business is being made redundant.

Currently the job losses in the construction products sector are around 8% but the company said ‘further significant reductions in workforce are expected to occur over the next several months’.

Managers throughout the company have had a pay freeze and long-term compensation for executives is being reduced by 10% to 50%.