Responding to weakness in housing and automotive markets, PPG Industries Inc. said Wednesday it will close three coatings and glass plants as part of a restructuring plan that will eliminate several hundred jobs and save $100 million annually.
"The actions we are taking will streamline our worldwide manufacturing footprint and staffing levels following our recent acquisitions, the most notable of which is SigmaKalon," PPG Chief Executive Charles E. Bunch said in a statement.
PPG also said its third-quarter earnings will be reduced between $35 million and $40 million, or 20 cents to 25 cents a share, because of production shutdowns and damages from hurricanes Ike and Gustav, and a further decline in the automotive market. The company also has been hurt by a strike at Boeing Co. that delayed orders for coatings and transparencies.
The company's automotive coatings plant in Springdale will remain open, but two plants in Canada and Netherlands will close, eliminating 260 jobs. One glass production line at an Illinois plant, where 275 people work, will be idled, PPG said. Other reductions in the work force will result in an undisclosed number of workers in North America and Europe losing their jobs, spokesman Jeremy Neuhart said. Details of where those job cuts will occur were not released.
PPG is reducing costs in its automotive coatings business because of fundamental shifts in the industry, chief financial officer William Hernandez said.
Because of the decline in the residential construction market, PPG said it will close its glass plant in plant in Ontario next year, cutting 170 workers, and will idle one float glass production line at its Mt. Zion, Ill., facility, where 225 people work, Neuhart said. It also plans to write off idle production facilities in its fiber glass and chemicals businesses.
The restructuring will cost the company about $160 million, or 65 cents a share, which will be recorded in third-quarter results. It also will cost about $25 million to integrate SigmaKalon businesses into PPG. Another $15 million in restructuring charges will be taken in the second half of next year, PPG said.
Bunch said PPG is continuing to evaluate ways to strengthen its businesses, which may result in additional restructuring actions and related cost savings in 2009.
PPG is in the process of selling a 60 percent ownership stake in its automotive glass businesses to a private equity firm, Kohlberg & Co.. That sale will include its Creighton plant in East Deer, as well as Tipton in Blair County and Meadville in Crawford County.
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