Head Sport AG has decided to outsource 90% of its tennis racquet production from its European sites in Kennelbach, Austria and Èeské Budejovice, Czech Republic to China. The move is in response to the sharp rise in the Euro-Dollar exchange rates over the past two years and the substantial cost increase of carbon fiber. Social plans for the employees concerned – 120 in Kennelbach and 130 in Budejovice – will be worked out in talks with the workers council and employees.
Head said 75% of their racquets have been sourced from China for several years. The total one-time capacity reduction costs at both locations will amount to approximately $6 million, 50% of which are asset write-offs and 50% are cash costs.
No changes are planned in the Winter Sports Division of Head.
