SKF says cutting costs to save $23.5 million a year

STOCKHOLM (Reuters) -- Sweden's SKF, the world's biggest bearings maker, said today it would take new measures to cut costs and planned to shed 1,000 jobs.

SKF said in a statement the steps, which included the previously announced closure of a plant in South Africa, would cost around 400 million Swedish crowns ($59 million) and generate annual savings of around 160 million ($23.5 million).

"The different activities, that will run during 2007 and will affect the operations in China, Italy, South Africa and a number of other countries, will reduce the number of employees by about 1,000 persons," the firm said.

The group has benefited from strong demand in its key markets over the past several quarters, but in recent months production cuts at the big three car makers in the U.S. -- Ford Motor Co., General Motors and DaimlerChrysler -- have hit demand at SKF's automotive business.

SKF said 160 million crowns of the total cost for the cuts would be booked in its automotive division while 220 million would impact its industrial unit. Around 20 million crowns would be booked in the service division.

The firm said it would also book a total income from the operations and sale of shares in part-owned Ovako, which was sold to Hombergh Holdings, WP de Pundert Ventures and Pampus Industrie Beteiligungenin in July, of 450 million crowns in its fourth quarter accounts.

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