Vattenfall to cut 4,000 jobs

  • 2003-05-08

Vattenfall chief Lars Goeran Josefsson said in a newspaper interview published May 5 that the Swedish energy giant plans to cut 4,000 jobs at its German unit, Vattenfall Europe, by 2005.

But Vattenfall Europe is still considering buying some of the assets being put up for sale by rival energy giant E.ON as part of its acquisition of gas supplier Ruhrgas, Josefsson said.

Vattenfall Europe was formed from the merger of German utilities HEW, Bewag, Veag, and Laubag. Josefsson told the business daily Handelsblatt that about a third of the potential job cuts arising from the integration of the companies had already been implemented.

"The process of integration, which entails the loss of 4,000 jobs, will be completed by the end of 2005," he added.

In January, the head of Vattenfall Europe, Klaus Rauscher, said that only 3,000 jobs would be cut by 2005.

Vattenfall Europe is Germany's third-biggest electricity supplier, but aside from a stake in the Berlin-based gas supplier Gasag, it has lacked intense activity in the gas sector.

Asked by Handelsblatt whether he planned to change that, Josefsson replied, "Not this year, but definitely over the next 10 years. Germany plans to pull out of nuclear energy, and I expect that coal mining subsidies will also be further scaled back. That means more gas."

Electricity was Vattenfall's core area of business, Josefsson said.

"But gas is also interesting because it can be combined with both heat and electricity."

A final decision had not yet been reached on whether Vattenfall Europe would buy the stakes in the regional utility EWE and the gas supplier VNG being put up for sale by E.ON, Josefsson said.

On the face of it, the stakes were interesting, he said.

"But it depends on the price. And the second question is whether minority stakes are worth it and who the other shareholders are. We're still thinking about it."

Josefsson said that Vattenfall still had cash to spare for small-scale acquisitions.

"We've still got money in the bank for small acquisitions. And anyway, acquisitions can be financed in other ways, such as via an asset swap. But this year, that's more of a hypothetical issue."

The Vattenfall chairman rejected the possibility of tying up with Gaz de France as speculated in the German press.

"The issue Gaz de France or other alliances are not on the agenda at the moment," Josefsson said.

"The most important thing we need to achieve over the next 10 years is to increase the performance of our company," he said.