Kongsberg Automotive to downscale production at Rollag facility by 2018

The board of directors of Kongsberg Automotive ASA has decided to reduce the activity level at its plant in Rollag, Norway. The forging activity will be outsourced and the internal processes will be simplified. This will create more flexibility and enable a move to an alternative KA location after a 3 year period.

Kongsberg Automotive’s Rollag plant hosts several manual and automated production processes and has had profitability challenges over the past 15 years. Despite several improvement measures and the best efforts of the dedicated employees over a considerable period of time, the plant has not been able to achieve satisfactory or sustainable profitability.

Rollag will be developed in the direction of a pure machining and assembly operation by outsourcing the forging activity and making KA’s plants in Hvittingfoss and Brazil independent of Rollag services.

Forging is a labor intensive and expensive process in Norway, and is not well suited to automation. This move will reduce KA’s dependency on the ageing forge and reduce maintenance costs. The combined measures will provide a flexible operation that can be moved to another KA location after a three year period. KA will work with staff and employee representatives to ease the transition during this period, and will do its utmost to ensure that Rollag employees can be offered relevant alternative employment opportunities.

The Rollag plant began production in 1975 and was then part of the automotive division of ‘Kongsberg Våpenfabrikk’, which later became Kongsberg Automotive. The plant, which currently employs 87 people, produces stabilizers for truck cabins and rear axles as part of KA’s Driver Control Systems business area.

The facility hosts several different processes; from cutting, forging, automated machining, hardening and robot welding, to assembly and powder coating. In 2013 the Rollag plant posted a loss of just over EUR 3 million at the EBIT level on revenues of EUR 17.5 million. The plant looks set to remain unprofitable in 2014.

“While the Rollag plant has an important place in KA’s history, the complexity and processes at the factory combined with challenging markets have been barriers to achieving profitability. In a high cost country like Norway, it is critical to have a product portfolio suited for a high automation level. Automating the manufacturing of the current Rollag products has however proven to be difficult. With these measures we want to create more flexibility with a view to moving operations to an alternative KA location within a 3 year period. We will work hard to ease the transition for our employees and maintain all obligations with our customers” said Hans Peter Havdal, CEO of Kongsberg Automotive.