Rieter Holding Ltd. announced sales and profits for the Rieter Group will be lower than any forecasts for the year. The company cites the current global economic downturn, which has negatively impacted both textile machinery and automobile markets. The Textile Systems Division reports received orders are expected to decline 65 % in 2008 when compared to 2007 figures, and sales will decline 30 %. Operating profits before special charges also will not meet forecast figures.

Decreased demand for automobiles worldwide also has affected sales for Rieter's Automotive Systems Division. After reporting reduced profits in the first half of 2008 and anticipating lower sales for the rest of the year, Rieter launched an extensive restructuring program.

The program included the transfer of manufacturing operations and capacity adjustments in addition to a hiring freeze, termination of temporary employees, overtime reductions and early retirements.

In addition to the measures previously implemented, Rieter is reducing capital expenditures and is working to lower working capital. The company also continues to implement part-time work schedules for employees in North America and Europe, as well as layoffs of both temporary and permanent personnel.

The restructuring will cost the company some 250 million Swiss francs, and impairment charges on goodwill amounting to 100 million Swiss francs will have to be recognized. Rieter expects consolidated sales in 2008 to be more than 20 % lower than in 2007. In light of the current unsettling financial picture, Rieter said it will not make any financial forecasts for 2009 at this time.