Rubbermaid Inc. announced a restructuring to centralize purchasing and to share manufacturing among its divisions.
The consumer products giant will use its purchasing clout to get better deals on everything from resins to packaging to electricity. It wants closer alliances with its suppliers of resins, machinery and other materials and services, said spokeswoman Lorrie Paul Crum. The Wooster, Ohio-based firm expects the alliances to help drive its product innovation through shared research.
Rubbermaid started centralized resin purchasing last year and will expand it to all areas. Leon Salomon, former vice president of purchasing and logistics, was appointed to the new position of senior vice president of procurement.
The restructuring also means some Rubbermaid plants now dedicated to a particular division will be able to make products for other units, if they are closer to markets and have excess capacity. Plants also will move machinery to other sites where capacity is most needed, but Crum said it is too early for details.
Rubbermaid's divisions also will share ``best practices'' with each other, spreading materials, molding and other expertise, which could lead to bringing some outside molding in-house, she said.
The divisions themselves will continue to be brand-driven and focus on what their customers want. But Rubbermaid's manufacturing structure will be coordinated more among various plants. The new format is based on how the firm's European operations share assets among divisions.
Michael Naylor, in the new position of president of operations, will oversee manufacturing consolidation among the divisions.
Analyst Eric Bosshard with Midwest Research/Maxux Group said the emphasis on manufacturing is a good move by Rubbermaid management.
``[Rubbermaid has] constantly been restructuring for three or four years,'' Bosshard said from his Cleveland office. ``But this is focused on manufacturing, which [Rubbermaid] hasn't focused on historically.''
He said he does not expect Rubbermaid to export too much U.S. production offshore. Its main U.S. competitors, for example, do most of their molding in North America for domestic markets.
Crum said the restructuring was not a response to a rumored takeover offer. ``We are not engaged in any such [takeover] discussions,'' she said.
Recent news accounts speculated Rubbermaid and other consumer products firms might be takeover targets for Sunbeam Corp.
``We are doing what we need to create sustainable growth,'' Crum added in a telephone interview.
The firm predicted the restructuring will give it annual savings of $200 million by the end of the year 2000. Crum said it too early to tell how many of Rubbermaid's 13,000 employees will be affected by the changes.
Rubbermaid also announced Jan. 21 that it completed the acquisition of European housewares major Curver Consumer Products from DSM NV for $143 million. It predicts Curver will add $180 million to Rubbermaid's European sales this year, boosting its non-U.S. business to about 25 percent of total sales. Rubbermaid predicted 1997 total sales at about $2.4 billion, up slightly from 1996.