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The situation of mechanical engineering profits in Europe was already very difficult, and the crown pandemic worsened the situation. That is why Pago is moving this business abroad. Service and sales as well as the label division with 100 employees will remain at Grabs.
Mechanical engineering at Pago at Grabs is lost with 30 jobs.
In mid-2012, the Japanese company Fuji Seal acquired the Grabs-based Pago group for 121 million Swiss francs. The owners of Pago, one of the world’s leading manufacturers of labeling systems, used it to regulate their succession. Fuji Seal, which produces packaging machines, shrink films and labels, expanded its range.
The Japanese were not really happy with the Pago group. For some years, efforts have been made to bring the business to a sustainable green branch. At the German Pago location in Aichtal, south of Stuttgart, for example, 100 jobs were cut, reducing the number of employees in the Pago Group to 900. Jobs were also lost at Grabs, seven of them in 2014. The entire group now has only 415 employees.
Label Division with 100 Employees Remains at Grabs
And now hitting the Grabs headquarters again. As the company announced, mechanical engineering will move to Germany with 30 jobs. Grabs, on the one hand, maintains that part of the mechanical engineering division that serves clients in Switzerland and Austria, as well as sales. On the other hand, the label division with 100 employees remains at Grabs.
Payment tag examples.
The managing director of Pago, Shingo Sakurai, justifies the restructuring of mechanical engineering with “the difficult situation of earnings of this commercial area in Europe”. We are talking about “decrease in the reception of orders and particularly high losses” in the mechanical engineering of the Pago Group in the last year. Specific figures are not yet available.
In the red for years
The entire Pago group has also been in the red for quite some time. It posted a loss of CHF 800,000 for fiscal year 2018/19 in late March 2019, and a loss of CHF 6.25 million for the prior year. The most recent turnover was 100 million Swiss francs, and the trend is decreasing. And now the crown crisis is likely to have “serious consequences” for further sales development.
Fewer orders, big losses and, to make matters worse, Corona: all this makes it “inevitable” to switch the production of the machines from Grabs to Pago Labeling Systems GmbH in Germany to increase efficiency, especially since there is no market recovery in sight.
“Painful” relocation and a social plan
Sakurai emphasizes that before presenting the “painful relocation plan” to a business meeting on Tuesday, “all options had been examined.” The manager also commends employees for their competence and commitment.
Payment has started a two-week consultation process. During this time, employees can submit suggestions until May 26 to avoid or mitigate job cuts. Then the final decision is made. If the relocation continues, Pago plans to provide a social plan. A Pago spokesperson says: “Early retirement and other socially acceptable measures are being considered.”
19th century companies.
Pago’s roots go back to 1896, when it was founded in Buchs as a stationery store. Fuji Seal has existed since 1897. In 2014, the Japanese company broke the $ 1 billion sales mark for the first time.
