Johnnie Walker Enacts Production Slowdown
So far in this economy, whisky has continued to thrive, boosted by growing sales in Asia. But the Glasgow Evening Times reports that spirits company Diageo will be giving around 650 workers at the Diageo Johnnie Walker packaging factory in Kilmarnock, Scotland a week off in March and a week off in April in order to halt production and save money. The workers will continue to be paid while production is halted. The plant is one of three operated in Scotland.
Earlier this month Diageo cut its profit forecast and announced a cost saving program. As Blogging Stocks mentioned, the company cut its full-year growth forecast to a range of four to six percent back from an earlier range of seven to nine percent amid fears that consumer confidence would continue to fall.
Reader Comments (Page 1 of 1)
Eric Feb 28th 2009 6:40AM
I wish the article would be more specific and explain how they are saving money while halting production. The employees are still being paid, so where is the cost savings and how much can it really be? Curious minds want to know.
Don Feb 28th 2009 12:43PM
No shipping costs, reduced utility costs, no increased inventory in the warehouse. Unless you have access to the actual data it may not sound like much but since we don't have the details one must assume that they know what they are doing.
Frank Feb 28th 2009 8:28AM
The savings will come from shutting down the factory. use less electricity, won't have to buy supplies for production.
Also I wonder if they are giving them the week off or forcing them to take their vacation at that time?
Sammy Feb 28th 2009 6:58PM
I too wonder how giving the employees two weeks paid time off is going to save them enough money to make it worthwhile. Are we really expected to believe that the cost of running the plant is so high(electric and other expenses) that to stop shipping the product will save them that much money? That sounds like the oil companies when they keep oil in the tankers off the coast so the supply of gas stays lower so they can charge more for it at the pumps.
Reminds me of the time my wife's employer made direct deposit mandatory for all employees because that was going to save them thousands of dollars a year on writing checks and further keep the cost down because they would not be having to pay the supervisors to walk around handing out the checks. I agreed with saving the cost of the checks but, the supervisors were all salaried, it did not cost one cent more having them go around handing out the checks.
Marsha Feb 28th 2009 12:42PM
Shutting down the plant will save thousands in utilites. Just a small fast food chain restaurant cost thousands a month. I commend them for finding better ways to cut expenses effecting jobs or salary. Looks like I am going to change brands. I have to support a company that tries other avenues before asking the Government to bail them out or to cut jobs. Also Frank I would be willing to be that the employees won't have to take vacation time since they are already getting paid. I know that is what Toyota is doing at some of their plants. They pay their workers their average daily pay when they demand they take off.