WOOSTER, OHIO - At its annual shareholders meeting April 23, Rubbermaid Inc.'s restructuring took center stage, both inside and outside an auditorium in Wooster. For example: Rubbermaid executives told shareholders they are refocusing factories to specialize on specific product categories. Changes also will impact distribution, as the company reduces product handling with a goal on high-volume items of shipping from the molding machine directly to the truck. Rubbermaid also wants to halve its number of suppliers, from 3,600 today to 1,800 by the end of the year.
Officials said the company has eliminated 45 percent of its stock-keeping units to simplify inventory tracking and handling. Examples of SKUs in housewares include sets of food savers arranged in different-sized packs or colors.
Outside the meeting, about 100 members of United Steel-workers Local 302, which represents more than 1,000 workers at Rubbermaid's Wooster plant, braved a heavy, cold rain to protest job cuts from the restructuring.
Rubbermaid announced the restructuring in December. During the next two years, the housewares and commercial products giant plans to lay off about 1,200 em-ployees and close nine facilities. Rubber-maid finished 1995 with profit dropping 74 percent, to $59.8 million. Sales increased 8 percent, to a record $2.34 billion.
Officials blamed the plunge on a one-time charge of $158 million for the restructuring, major resin price hikes and the tough retail environment. They repeated those themes at the shareholders meeting held at Fisher Auditori-um at the Ohio Agricultural Re-search and Development Center, just down the road from company headquarters.
Wolfgang R. Schmitt, chairman and chief executive officer, said Rubbermaid's raw materials bill was $200 million higher in 1995 than 1994.
Prices of polypropylene and polyethylene, the two major housewares resins, climbed through the first half of 1995, then declined through the second half of the year. Through the first quarter of 1996, prices have remained stable, but they may move up again. Schmitt said he believes resin prices will be fairly stable through this year.
Rubbermaid got stung last year in what Schmitt called a ``less-than-effective'' effort to push through resin price hikes. The move angered mass retailers and sent some business to competitors.
But Schmitt said the damage came in special price-cutter items designed to lure shoppers, not a loss of shelf space.
``The place where we got hurt last year were these in-and-out promotions,'' Schmitt said in a press conference after the meeting.
Unit volume held steady even while Rubbermaid had to raise some prices last year to offset resin hikes, Charles Carroll, president and chief operating officer, told shareholders.
Carroll's comments outlined the new focused-factory concept.
``Our manufacturing and distribution are essentially `under construction,' '' he said. Rubbermaid will follow the model set by its Commercial Products unit in Winchester, Va., with work cells grouped together for product lines.
Rubbermaid also plans to beef up factory automation.
Some improvements already have been made, Carroll said. At the Home Products Division, the manufacturing cycle time has been cut by 46 percent. The time for mold changes has been cut by about 40 percent.
Outside the meeting, USW members feared a different kind of cut - their jobs. Local 302 President Ann Flener said it was the first time the union had picketed outside a Rubbermaid shareholders meeting. The current five-year contract expires Nov. 1. Some machinery is being moved out of the Wooster factory, according to union members.
Rubbermaid plans to reduce the number of hourly jobs in Wooster by 300. So far, about 140 positions have been eliminated through attrition and retirements, said spokeswoman Lorrie Paul Crum.
Meanwhile, Rubbermaid re-ported its first quarter 1996 data. Net sales declined by 5.4 percent, to $533.3 million from $563.8 million for same period in 1995 - reflecting the discontinued SKUs. Profit was $41.7 million, a 23 percent decline from $54.1 million a year ago.
Overall, selling prices matched prices of a year ago, Schmitt said. However, Rubbermaid has re-duced prices on some high-volume products, which company officials would not identify.