Changes in Hydro Light Metals

(Sep. 25, 2001) The project team working on the reorganization of Hydro Light Metals is suggesting a new organizational structure with stronger coordination between the business units and a different grouping of the Light Metals activities.

To illustrate, Magnesium and Rolled Products will be placed in a Metal Products unit, while all downstream activities in Light Metals that target the automotive industry will be gathered in a separate Automotive unit. In addition, a new unit for Light Metals activities in North America - excluding automotive activities - will be established.

"An examination of the cost structure of the support functions has uncovered a substantial "cost gap" that will have varying effects on manning levels. Although, there are extremely efficient units within the area of Light Metals, the business area can still achieve large savings by transferring these "best practices" internally. Comparisons between competitors, and other companies, to Light Metals have shown a similarly sized cost gap," says Jon-Harald Nilsen, Executive Vice President, Hydro Light Metals.

"In the second phase of the project, we will detail our new work processes and coordinated work tasks. This will involve the organization to a much greater degree than has been the case until now. The new organizational structure will be operational in January 2002."

"The current structure has been organized for growth within each separate business area. However, the overall profitability of Light Metals has not been satisfactory. In the new organization, Light Metals will focus on work methods that help close the identified cost gaps. This will demand horizontal cooperation, both operationally and geographically. Moreover, the new working form will be designed to stimulate enterprise, creativity and learning among employees."

"We will also recommend that Light Metals avoids using the current "division" designation for its new business units to help signal the fact that a new structure is being created. The names of the new units, however, have not yet been finalized. If we want to achieve our goal and become one of the leading aluminium companies in the world, then we cannot work in ways that are as fragmented as they are today. We have to simplify our work processes and make them more efficient," says Jon-Harald Nilsen. "Doing this will allow us to have more focus on customers and markets".