Mattel Inc. is abandoning rotational molding in North America by closing its Augusta, Ga., Fisher-Price plant.
Mattel will outsource rotomolded products such as its Crazy Coupe, Barbie House and outdoor play equipment, said spokesman Sean Fitzgerald. Production at Augusta is slated to wind down by the end of September. About 60 people will lose their jobs. The operation employed as many as 100 during peak seasonal demand.
The shutdown is part of a broader cost-cutting program for the El Segundo, Calif., toy giant that will eliminate 3,000 workers, about 10 percent of its work force. More closings are possible, but officials did not provide details. Mattel recorded a loss of $17.9 million for its first quarter, compared to profit of $12.7 million a year earlier.
Demand for large, rotomolded products is too weak to support a dedicated production facility, Grady Brown, senior vice president of Mattel's U.S. operations, said in a news release. Major retailers balk at carrying the bulky items because they don't generate enough sales to warrant the floor space they occupy.
Fitzgerald said Mattel will contract out rotomolding to U.S. companies. The company is pondering what to do with the equipment in the 300,000-square-foot Augusta plant.
At least one rotomolder would be interested in picking up the Augusta work.
``It is in line with our skills,'' Hedstrom Corp. Vice President James Braeunig said in a telephone interview. ``We are toy-based and understand the requirements'' of an original equipment manufacturer in the toy industry.
Augusta became Mattel's main rotomolding facility in 1997 when it shut down its Medina, N.Y., plant. That facility began rotomolding in 1994. In 1995 it increased rotomolding when Mattel introduced a line of outdoor play products, while the plant phased out injection and blow molding operations. Mattel also did rotomolding at its Murray, Ky., and Orange, Calif., operations.
Mattel has been diversifying away from traditional toys to electronic products. It recently agreed to buy software firm Learning Co., and has entered CD-ROM markets. Mattel also is developing toys with chip maker Intel and will spend $50 million on ``a new Internet initiative.''
Mattel expects the global cutbacks to save $50 million this year and $400 million during the next three years.