It is reported that Rautaruukki's engineering division, Ruukki Engineering, has finished employer-employee negotiations initiated in May 2008 to improve profitability. The negotiations concerned the division's Hungarian unit Ruukki Tisza Zrt where better profitability is being sought by cutting overheads and by improving organizational functionality.

In Finland, negotiations concerned senior salaried employees in the division's Tampere, Hämeenlinna and Helsinki units. The aim is to remove overlapping at the group, division and unit levels.

At Ruukki Engineering's Hungarian unit Ruukki Tisza Zrt a new enterprise resource planning system will be introduced as part of efficiency improvement measures. The deployment of Ruukki's common systems and working methods at the unit will reduce overlapping work and simplify administrative structures. It has been agreed to cut the number of white collar jobs by a total of 190 during the course of this year and the next. During the first phase, which takes place in July 2008, the number of administrative staff will be reduced by 108, when the new organizational structure and processes are introduced. The next phases will take place in October 2008 and January 2009.

At the moment there are 275 white collar employees at the Hungary unit.

A total of 60 senior salaried employees were subject to the negotiations in Ruukki Engineering's Finnish units in Helsinki, Tampere and Hämeenlinna. When the negotiations began, it was estimated that 25 jobs would be affected. As a result of negotiations 17 white collar jobs in division administration will be cut. Some of the persons affected will be offered new jobs at Ruukki. The negotiation result also includes retirement agreements and terminations of seven contracts. The measures will begin immediately and be completed during the autumn.

Ruukki Engineering launched a program to improve productivity and profitability across the division in February 2008. The measures aim at improving the division's operating profit by EUR 20 million in 2008. In the same context, Ruukki Engineering adopted a new organization and management model to support divisional growth and profitability. The new management model clarifies financial and operational responsibilities and improves the use of resources.