300 Jobs Cut; Three Plants Closing
COLUMBUS, Ohio--(BUSINESS WIRE)--Dec. 5, 2008--Worthington Industries (NYSE: WOR) today announced actions the company
is taking to reduce the workforce by approximately 300 employees in the
steel processing and metal framing business segments, approximately 4%
of the total workforce. These actions are in addition to the previously
announced (October 23) closings and job cuts.
Dietrich Metal Framing continues to be heavily impacted by the steep
drop off in construction that has resulted from the global financial
crisis and, along with steel processing, has seen a dramatic decline in
pricing and demand. To mitigate the negative impacts of the current
business environment, Dietrich will close its Lunenburg, Mass., facility
by February 28, 2009, and suspend operations at two facilities: Miami,
Fla., by the end of February, and Phoenix, Ariz., by the end of January.
Dietrich intends to re-open the 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
workforce.
The steel processing segment will reduce its workforce across all
locations by approximately 12% or 186 employees. The job cuts include
both hourly and salaried employees. The company is also reducing work
schedules to better align with the lower market demand and employees are
being asked to take unpaid time off.
It is estimated that these 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. Additionally, there should be a
significant reduction in overall compensation expense as profit sharing
and bonuses are expected to decline 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. The company continues to be focused
on reducing all costs; accelerating Transformation initiatives; selling
non-core assets; and taking necessary steps to reduce cash requirements
and maintain liquidity.
"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." McConnell added, "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."
Worthington Industries is a leading diversified metal processing company
with annual sales of approximately $3 billion. The Columbus, Ohio, based
company is North America's premier 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 7,500
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.
Safe Harbor Statement
The company wishes to take advantage of the Safe Harbor provisions
included in the Private Securities Litigation Reform Act of 1995 (the
"Act"). Statements by the company relating to projected timing, results,
cost savings, costs and charges, expenditures, impacts and benefits from
Transformation efforts, consolidations, transition plans, plant
closings, cost reduction efforts, layoffs and other workforce
reductions, or other new initiatives; expected cost savings,
profitability, balance sheet strength or financial strength; future or
expected growth, growth opportunities, performance, sales, results,
earnings, profit sharing or bonuses; projected capacity and working
capital needs; pricing trends for raw materials and finished goods, and
the impact of pricing changes; anticipated capital expenditures and
asset sales; expectations for company and customer inventories, jobs and
orders; expectations for the economy and markets; expectations for
improvements in efficiencies or the supply chain; expectations for
improving margins and increasing shareholder value; and other
non-historical matters constitute "forward-looking statements" within
the meaning of the Act.
Because they are based on beliefs, estimates and assumptions,
forward-looking statements are inherently subject to risks and
uncertainties that could cause actual results to differ materially from
those projected. Any number of factors could affect actual results,
including, without limitation: the effect of national, regional and
worldwide economic conditions generally and within major product
markets, including a prolonged or substantial economic downturn; product
demand and pricing; changes in product mix, product substitution and
market acceptance of the company's products; fluctuations in pricing,
quality or availability of raw materials (particularly steel), supplies,
transportation, utilities and other items required by operations;
effects of facility closures and the consolidation of operations; the
effect of consolidation and other changes within the steel, automotive,
construction and related industries; failure to maintain appropriate
levels of inventories; the ability to realize targeted expense
reductions such as head count reductions, facility closures and other
expense reductions; the ability to realize other cost savings and
operational efficiencies and improvements on a timely basis; the overall
success of, and the ability to integrate, newly-acquired businesses and
achieve synergies therefrom; capacity levels and efficiencies within
facilities and within the industry as a whole; financial difficulties
(including bankruptcy filings) of customers, suppliers, joint venture
partners and others with whom the company does business; the effect of
disruption in business of suppliers, customers, facilities and shipping
operations due to adverse weather, casualty events, equipment
breakdowns, acts of war or terrorist activities or other causes; changes
in customer inventories, spending patterns, product choices, and
supplier choices; risks associated with doing business
internationally, including economic, political and social instability,
and foreign currency exposure; the ability to improve and maintain
processes and business practices to keep pace with the economic,
competitive and technological environment; adverse claims experience
with respect to workers compensation, product recalls or liability,
casualty events or other matters; deviation of actual results from
estimates and/or assumptions used by the company in the application of
its significant accounting policies; level of imports and import prices
in the company's markets; the impact of judicial rulings and
governmental regulations, both in the United States and abroad; and
other risks described from time to time in the company's filings with
the United States Securities and Exchange Commission.
CONTACT: Worthington Industries, Inc.
Media Contact
Cathy M. Lyttle, 614-438-3077
VP, Corporate Communications
E-mail: cmlyttle@WorthingtonIndustries.com
or
Investor Contact
Allison M. Sanders, 614-840-3133
Director, Investor Relations
E-mail: asanders@WorthingtonIndustries.com
or
www.WorthingtonIndustries.com
Source: Worthington Industries