NEGOTIATIONS FAIL TO KEEP PRODUCTION AT BIRKENWERDER

Negotiations between Francotyp-Postalia GmbH and Francotyp-Postalia Vertrieb und Service GmbH and the works council to keep production at Birkenwerder have ended in failure. Despite more than 20 meetings with the employees' representatives, no agreement could be reached. After the works council refused to accept any of the measures proposed by the company, including the offer of guaranteed jobs for 320 employees, the company's negotiators withdrew their proposals today and declared the negotiations terminated without result.

"We regret that despite our intensive efforts, no agreement could be reached on an acceptable or sustainable alternative for the long term in order to keep production at Birkenwerder," stated Hans Szymanski, chairman of the Managing Board of Francotyp-Postalia Holding AG.

"With the introduction of our new product line Phoenix, we plan to realign production strategy. The concept we have put forward necessitates restructuring in order to create competitive conditions at Birkenwerder," Szymanski went on to explain. "At the end of the day, we have no other option. We know that this will be a severe blow to many employees, but we must secure the future of the whole FP Group, which employs over 1,000 people."

As already announced, negotiations will now start to terminate production at Birkenwerder. The required procedures involving the Economics Committee and the Works Council will commence in the near future.