Heidelberg Management and Works Council Agree on Structural Measures at the Muehlhausen and Ludwigsburg Sites

• Staffing level reduction by 84 in Muehlhausen socially acceptable
• Framework agreed for merging the Muehlhausen and Ludwigsburg sites
• Shortlist of four locations for the new site

The Management Teams and Works Councils of the Heidelberg sites in Ludwisburg and Muehlhausen have agreed on a package of measures following constructive and intensive negotiations. The measures agreed upon include arrangements governing both the planned merger and relocation of the two sites as well as a socially acceptable reduction of staffing levels at the Muehlhausen site which is necessary regardless of the relocation. Through this merger, Heidelberg aims to enhance the cost-effectiveness of both sections and thereby safeguard jobs.

Firstly the framework for the relocation and merger of the Muehlausen and Ludwigsburg sites was defined, with due regard to the interests of both the Company and the workforce. There are four shortlisted locations for the new site - Ditzingen, Fellbach, Korntal-Muenchingen and Ludwigsburg. The final consultations on the new location are planned for the start of 2003.

The Muehlhausen management team and works council also agreed on the reduction in staffing levels necessary regardless of the decision to merge the two sites. All in all, the planned concentration of all finishing products directly connected with digital presses in Rochester (New York, USA), the optimization in development activities and the adaptation of the assembly capacity to match the current sales figures necessitate the staff reduction by 84 jobs in Muehlhausen. Heidelberg is offering staff a fixed-term employment contract in a transfer company and part-time solutions for older staff. The reduction in staffing levels will be implemented at the latest by mid-2003. The planned job cuts in Muehlhausen will take place as part of the merger with the Ludwigsburg site.

"We are glad that the negotiations achieved allow us to promptly implement the measures decided on by the Management Board",  said Bernhard Schreier, Chairman of the Company's Management Board. "This means that some of our planned cost savings of 200 million Euro will become effective as early as this fiscal year - a measure that will help safeguard jobs for the future." At the end of October, Heidelberg had introduced a program to deliver sustained cost reductions worth 200 million Euro. These savings will come into full effect in fiscal 2003/2004.

For further information:
Heidelberger Druckmaschinen AG
Investor Relations
Dirk Kaliebe
Tel: +49 (0)6221 92 60 20
Fax: +49 (0)6221 92 60 61
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