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Atlas Copco Rental Service Announces Slow Start

Tue March 20, 2001 - National Edition
Construction Equipment Guide


Atlas Copco Rental Service announced a slow start of the year.

"The rationalization and efficiency measures announced in relation to the merger between Prime and RSC have been executed, but we must take further actions to achieve targeted operating results," said Tom Bennett, business area executive for Rental Service. "The slowdown in the construction and manufacturing industry activity has affected us more than anticipated. Also, we experienced weather conditions worse than normal for the season. This has reduced our revenue growth for rental products in the first quarter of the year.

"Our rental business also had some negative effects on revenues from 28 store consolidations. However, we consider those as being short-term and related to the first quarter only.

"The operating costs for Rental Service are too high and the rental fleet is too big for the present level of operation," he said.

The Rental Service business area is reducing fixed and variable costs, including a reduction of the workforce of 10-15 percent. About half of the reduction has already been executed, and is related to the previously announced merger between Prime and RSC last fall. The effect from these actions will materialize gradually during the year.

The new measures include a restructuring into a more flat organization with fewer management layers, to safeguard quick reactions to any type of changes.

Following the reorganization, Art Droege, deputy executive of the Rental Service business area will step into the position of chief operating officer and president of Rental Service Corporation.




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