Jungheinrich AG intends to close its troubled MIC SA division in France next year, potentially affecting 375 employees.
MIC SA, which makes hand pallet trucks, had been affected by the "increasing dominance" of Asian competitors.
"The fundamental changes in the world market for hand pallet trucks have led to declining levels of incoming orders and to losses at MIC SA as a result of the increasing dominance of Asian producers with the associated enormous pressure on prices," Jungheinrich's third quarter report said.
"The worsened and still worsening parameter conditions in the market and the financial position of MIC SA mean it is no longer possible to continue operation of the company without taking further substantial financial resources (from) the group."
In the report, released last week, Jungheinrich said it "stood its ground" in the third quarter despite difficult economic conditions. It reported improved returns on sales and higher net income.
The company achieved sales of EUR370 million (USD446 million) in the third quarter, up 2.8% on the EUR360 million (USD414 million) posted for the same quarter in 2002. The result put sales at EUR1.086 billion (USD1.249 billion) for the nine months to September 30.
Incoming orders finished at EUR349 million (USD402 million), down from the EUR357 million (USD410 million) posted last year. Net income rose 26.5% from EUR10.2 million (USD11.9 million) to EUR12.9 million (USD15 million).