Worthington Announces Additional Workforce Reductions, Closings
12/08/2008 - Worthington Industries announces additional workforce reductions of approximately 300 employees in its steel processing and metal framing business segments, which equates to approximately 4% of the company’s total workforce.
Worthington Industries announced additional workforce reductions of approximately 300 employees in the steel processing and metal framing business segments, which equates to approximately 4% of the company’s total workforce. These actions are in addition to the previously announced (October 23) closings and job cuts.
Dietrich Metal Framing, which continues to be heavily impacted by the steep drop-off in construction and a dramatic decline in pricing and demand, is planning to close its Lunenburg, Mass., facility by February 28, 2009. Dietrich also will suspend operations at its Miami, Fla., facility by the end of February, and at its Phoenix, Ariz., facility by the end of January.
Dietrich said that it intends to re-open its Florida and Arizona facilities if business returns, but in the meantime, the McDonough, Ga., facility will service the Florida market and the Colton, Calif., facility will provide product to the Arizona market. Massachusetts customers will be served by the Boonton, N.J., operation. The total number of employees in the metal framing segment impacted by the closings is 125, approximately 9% of the metal framing segment’s workforce.
Worthington’s steel processing segment will reduce its workforce across all locations by approximately 186 employees, representing about 12% of the segment’s workforce, with the cuts to include both hourly and salaried employees. The company also plans to reduce work schedules in line with lower market demand, employees will be asked to take unpaid time off.
Worthington is estimating that these additional workforce reductions and plant closings will result in annual savings of approximately $17 million, with restructuring charges of approximately $5 million primarily due to severance costs and asset write-downs. The company said there also should be a significant reduction in overall compensation expense, profit sharing and bonuses declining substantially as earnings are negatively impacted by the depressed market conditions. Worthington’s profit sharing and bonuses have long made up a far greater percentage of compensation than in most companies.
“These are unprecedented times for this industry and our company,” said John P. McConnell, Chairman and CEO of Worthington Industries. “We are reluctantly taking these actions, as they are needed to reduce operating costs in response to market conditions and the extraordinary economic environment.
“The Transformation effort that we began nine months ago continues to help us drive improvements in our operations, sales and sourcing even in this depressed business cycle, and positions us for success when demand returns, added McConnell. He also noted that, “while steel processing and metal framing have been severely impacted by deterioration in the automotive and construction markets, pressure cylinders has been less affected and continues to perform well.”
The company said that it continues to focus on reducing all costs; accelerating Transformation initiatives; selling non-core assets; and taking necessary steps to reduce cash requirements and maintain liquidity.
Worthington Industries is a leading diversified metal processing company with annual sales of approximately $3 billion. The Columbus, Ohio, based company is a leading North American value-added steel processor and a leader in manufactured metal products such as metal framing, pressure cylinders, automotive past model service stampings, metal ceiling grid systems and laser welded blanks. Worthington employs approximately 7500 people and operates 68 manufacturing facilities in 10 countries.
Founded in 1955, the company operates under a long-standing corporate philosophy rooted in the golden rule, with earning money for its shareholders as the first corporate goal. This philosophy, an unwavering commitment to the customer, and one of the strongest employee/employer partnerships in American industry serve as the company’s foundation.
