Power equipment major Alstom has readied a five-year restrucutring plan which will see it exit non-core areas, increase export turnover and hack employee costs.
The company, a subsidiary of newly-formed Alstom worldwide is also moving towards reorganising its product groups to focus on core competencies. Alstom has already embarked upon this divestment. It recently sold its low voltage components business to GE Electrical Distribution and Control India, the subsidiary of US major General Electric Corporation.
Citing high employee costs as a major area of concern, Alstom has stated in its annual report that "the percentage of employees cost to the total cost in most of our products is much higher than our competitors.This not only reduces our margins but also makes our products less competitive. Despite the voulntary retirement schemes of the earlier years, the company still contiues to be overstafffed in certain locations."
The company however plans to bring dowm employee costs only after discussion with the staff and union.
Alstom also plans to quality annd production efficiency at its plants and introduce total quality management. The company has also decided to focus on exports. It is targeting 8 per cent of total sales from exports in the next five years
Alstom was till recently known as GEC Alsthom.The company is seeking shareholder approval at it annual general meeting on Tuesday for the change in name following the change of name of its global parent.
Alstom's net profit has risen to Rs 38, 369 from Rs 27,247. The company has been hit by the recession in the Iindian economy. Its problemas have been further compounded by the liquidity crunch and the fallin the order book position.
The company is hopeful that the rehabilitation plan undertaken by it will yield results in the next three to five years.
