ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, January 23, 1996 TAG: 9601230071
SECTION: BUSINESS PAGE: B7 EDITION: METRO
DATELINE: AMSTERDAM, NETHERLANDS
SOURCE: ASSOCIATED PRESS
Fokker, which made the planes flown by the legendary World War I ``Red Baron,'' is in a financial tailspin.
Daimler-Benz, the German industrial giant that owns a controlling interest in Fokker, said Monday that it is not willing to finance losses at the company. And the Dutch government, which has subsidized Fokker, isn't offering enough money to keep Fokker in the air.
At Fokker's Amsterdam headquarters and at the five Dutch plants where assembly lines crank out turboprops and jets, employees struggled to put on a brave face.
If the company closes, it would mean the loss of 7,800 jobs - the largest single layoff in Dutch history.
Fokker's troubles contrast with the company's glory days, when engineer-turned-test pilot Anthony Fokker's name was synonymous with aviation pioneering.
Admiral Richard Byrd made the first flight over the North Pole in a Fokker, and Amelia Earhart was the first woman to fly over the Atlantic in another in 1928.
The Fokker factory in the Netherlands was destroyed in World War II, but rose from the ashes to re-enter the civil airliner market in the early '50s.
But hit by the weak dollar, an overcrowded and slack market for the passenger airliners it builds and high labor and restructuring costs, Fokker seems to have run out of fuel.
The company targeted the F-100 to take advantage of increased demand for jets on shorter-range flights. But stiff competition, chiefly from Boeing, Airbus and McDonnell Douglas, brought on fierce price cutting to win orders and led to mounting losses at Fokker.
Although U.S. aircraft builders have to contend with the same market conditions, their labor costs, paid in weak dollars, are comparatively lower.
Daimler-Benz said Monday that although more than 80 percent of its businesses were running satisfactorily, Daimler would record losses of $4.1 billion for 1995, more than twice as much as analysts had predicted.
``In the interests of the stockholders, the performance of the entire company should no longer be spoiled by the remaining 20 percent,'' the company said in a statement.
Daimler-Benz blamed its losses to a large extent on Fokker and told the Dutch government, which controls 11 percent of Fokker, that it would have to contribute $787 million to keep the airplane maker alive.
At a press conference, Dutch Economic Affairs Minister Hans Wijers said the demand was too high.
Wijers said that the government would do what it can to help as much of Fokker survive as possible. He did not elaborate. Fokker's board of directors met late Monday to discuss its next step.
Fokker chairman Ben van Schaik told a news conference after the meeting that no decisions had been reached. Further talks have been scheduled for today, he said, declining to answer questions.
He appealed for a month's grace.
``We need a month's breathing space so that we can look for a new partner as a going concern,'' he told the Amsterdam daily De Telegraaf. ``Whatever it costs, we must keep going with Fokker.''
The company already had been working hard to reduce its costs, cutting its workforce from 13,500 four years ago to only 7,800 today. Fokker already planned to trim that to 6,500 in the coming years.
At Fokker's plant on the edge of Schiphol Airport, most employees were already convinced that the end had come.
``Nobody reacted emotionally to the announcement. We were resigned to it,'' said Ted Coenraad, who has worked at Fokker for 17 years. ``We expected it, but it's still a big blow for everyone.''
Staff writer Greg Edwards contributed information to this story.
LENGTH: Medium: 72 linesby CNB