Dana Corp. to take $170 million charge
TOLEDO, OHIO — Dana Corp. announced strong third-quarter earnings and said it will take a $170 million charge against future earnings as it sheds employees and factories acquired in the takeover of plastic tubing supplier Echlin Inc.
Toledo-based Dana said it will close 15 plants and eliminate 30 distribution centers. As part of the restructuring, the company will take a pretax charge of $130 million in the fourth quarter and another $40 million pretax charge against earnings in 1999.
Dana also upped its planned job-cut target by 100 to 3,500 total employees, or 4 percent of its work force. More than 3,000 of the cuts will come from the ranks of former employees of Echlin Inc., a Branford, Conn., original equipment and aftermarket parts maker.
Much of the cost-cutting plan already was in place at Echlin before Dana acquired the company for $3.9 billion in July. After the takeover, Dana announced an accelerated cost-reduction program that, it said, promises big benefits for the combined company. Overall, Dana now says it can save $375 million in costs by the end of 2000.
In the quarter ended Sept. 30, Dana reported profit of $98 million on sales of $3 billion. Sales were up 3.4 percent. A year ago, the company had a third-quarter loss of $45 million on sales of $2.9 billion. Dana's financial report, including comparisons to last year, include Echlin's results. In the third quarter of last year, Echlin reported a one-time charge — related mostly to its restructuring plan — of $182 million.
Through the first nine months of 1998, Dana reported profit of $399 million on sales of $9.4 billion. In the same 1997 period, it reported profit of $204 million on sales of $9 billion.
Western Industries acquires Freedom
JOLIET, ILL. — Western Industries Inc. has expanded its custom injection molding business by acquiring Freedom Plastics Inc. of Joliet.
Freedom has presses with clamping forces of 30-720 tons and supplies a range of industries from plants in Joliet and Sheffield, Ill. It reported sales of about $14 million in 1996, according to Plastics News' survey of custom injection molders.
Ronald Morris, Western president and chief executive officer, said in an Oct. 19 news release that his firm plans other acquisitions. Western, based in Milwaukee, does custom injection and large-part blow molding in Chilton, Wis., and large-part blow molding in Winfield, Kan. It acquired the latter facility in 1996 when it bought KSQ Inc. Western also runs five metal fabrication plants. Its main markets are appliance, recreation, lawn and garden, agricultural and construction industries.
Flexcon building second film operation
COLUMBUS, NEB.—Flexcon Inc., a manufacturer of pressure-sensitive film, is constructing a second 200,000-square-foot plant on its site in Columbus.
``The growth of our business warranted the expansion in Nebraska,'' Dave McSherry, plant manager, said in a telephone interview. ``We have enough business to justify this and we're introducing new product lines at the second plant.''
The $15 million plant will be completed in two stages. The building will be enclosed by April and next September should be operational. About 75 people will be added to the staff in the next 24 months, McSherry said. Flexcon received about $500,000 in loans and grants from the state.
Flexcon currently operates a 200,000-square-foot plant on 70 acres and employs 125 in Columbus. The high-production plant serves all of the United States. The second facility will make specialty products for the Midwest and West.
The firm purchases films, such as PVC, PET, polypropylene and polyethylene, and laminates them. Labels for the health and beauty aid and beverage market are made at the plant. In addition, bumper stickers, decals and advertising posters for city buses are made at Flexcon from adhesive-backed plastic.
Flexcon, founded in 1956, is headquartered in Spencer, Mass.
Plastics Pennsylvania gets rolling
ERIE, PA. — Plastics Pennsylvania, a new statewide organization focused on work force development, had a strong turnout at organizational meetings held in September in four cities, organizers said.
The meetings in Erie, Harrisburg, Philadelphia and Pittsburgh drew a total of more than 80 people, and since then 18 firms have paid dues of $250 each. The group hopes to provide the state's industry with a government voice, which has been lacking, said Hoop Roche, acting chairman of Plastics Pennsylvania and chief executive officer of Erie Plastics in Corry, Pa.
``We are not presenting ourselves to the legislators,'' he said. ``It's not positive or negative. It's just a vacuum.''
The group hopes to complete elections and name permanent officers in December. It is supported by the Society of the Plastics Industry Inc. of Washington, and AMP Inc. of Harrisburg, Roche said.