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Heidelberg N. A. Consolidates Operations as Part of Business Review Plan, 225 Jobs Affected

Press release from the issuing company

Plan includes: - centralization and enhancement of a service call center - consolidation of spare parts and used equipment inventories - an expanded central demonstration center KENNESAW, Ga., May 29, 2003 – Heidelberg North America, which is the sales and service unit for sheetfed, prepress, post-press and digital products in the United States and Canada, is announcing the results of a recently conducted business process review that will improve service delivery and operations as well as reduce organizational costs. Business process review is a strategy used by many corporations that want to respond to changing market needs. Heidelberg North America’s effort included a comprehensive evaluation of critical operational areas such as sales, service, support and supply chain management, among others. As a result, Heidelberg North America identified a number of measures it will implement over the next 10 months, including: the centralization and enhancement of a service call center, consolidation of spare parts and used equipment inventories, an expanded central demonstration center and other initiatives that will increase the company’s ability to serve customers while reducing operational costs. “We work with our customers daily to evaluate their operations and identify how they can transform their businesses to be profitable while enhancing customer service. We decided that it was time for our organization to take advantage of the same successful approach,” said Niels M. Winther, president of Heidelberg North America. “We have been careful only to adopt measures that we believe will enable us to maintain or improve the superb level of service our customers expect from Heidelberg.” Among the key improvements to benefit customers is a comprehensive customer care and demonstration center to be located at Heidelberg North America corporate headquarters in Kennesaw, Georgia. The expanded center will represent Heidelberg’s full line of products, including the 28” and 40” format. The company’s four regional Technical Centers in Chicago, Los Angeles, Toronto and Cranbury, NJ, will continue to demonstrate press, prepress, post-press and digital products. Additionally, Heidelberg will develop a national service call center at its Kennesaw facility that will provide one point of contact for all customer service needs. The new center will include a significantly expanded technical help desk with more advanced remote troubleshooting for customers and will adapt new technology to provide enhanced service dispatch and tracking features. “These changes embrace the best-in-class business practices and technologies that are inherent in the way Heidelberg conducts business,” Winther said. “It will enable us to enhance the customer’s experience, making it easier to do business with us.” Organizational Impact Changes that will not visibly impact the customer, but enable Heidelberg North America to better deliver service and respond to market shifts, include restructuring of regional operations and reengineering supply chain management. Equipment order processing will be concentrated to five strategic centers, including the Kennesaw headquarters and the four regional Technical Centers. As a result, office space is no longer required in satellite locations, including Boston, Baltimore, Detroit, Dallas, Minneapolis and San Francisco. Sales and service representatives, as well as local management, will remain in these regions, however, and their ability to interface with customers will be enhanced due to the shifting of administrative functions to Kennesaw. Supply chain measures include the centralization of used equipment, spare parts and other inventory, enabling fewer stocking locations with better ability to source and deliver needed materials. A central parts distribution center previously announced – The American Logistics Center – will be launched in Indianapolis and will allow overnight delivery of parts ordered up until midnight seven days a week. This reorganization and streamlining of processes throughout Heidelberg North America will result in approximately 225 staff positions to be eliminated. Some of the employees filling these positions may be reassigned, while others may choose to participate in a voluntary separation program or carry out the term of their employment until the new organizational structure is enacted. More than 1,400 Heidelberg North America employees will continue to serve customers in the market. Changes will be implemented in stages to ensure a high level of customer care and will be completed by April 2004. “The world has changed. The printing industry and the global economy have seen dramatic changes in the last five years. Conducting business as usual is not an option for most businesses in our industry,” said Winther. “We decided to make a proactive effort that positions our organization for long-term success and enables us to weather market changes while maintaining our ability to best serve our customers.”