DÜSSELDORF, GERMANY (Dec. 5, 4:25 p.m. EST) — With plant closures and workforce cutbacks, leading extrusion machinery supplier Davis-Standard Corp. moved quickly this year in response to tumbling sales and the economic downturn.
Earlier in the year Davis-Standard announced the closure of two plants. One in Edison, N.J., shut down in September with a loss of 28 jobs, and the other, in Luton, England, closes at year's end with 52 jobs going.
The firm made other workforce reductions at its Connecticut headquarters and a plant in Somerville, N.J. In a bid to trim the number of salaried jobs by 40, Davis-Standard offered a voluntary severance package that was accepted by 60, according to human resources director Russell Chinni.
Even so, the Pawcatuck, Conn.-based company still could feel the effects of further cutbacks through 2002 as its parent, Crompton Corp. of Greenwich, Conn., looks for $60 million in savings before the end of next year.
Davis-Standard already has borne more than its fair share of the group's cost cutting this year, said President Robert W. Ackley. While the plastics machinery firm's sales represent about 10 percent of the group total, it already has achieved more than 10 percent of its savings to date, he said.
"We have done what we need to do and hit it early [in the year] ... and have made significant savings," Ackley said at K 2001 in Dusseldorf.
Even so, Crompton in October reported its third-quarter sales down 12 percent at almost $652 million, compared with the same period in 2000. The machinery division saw its sales plunge 50 percent from a year earlier, due mainly to lower unit volume, resulting in a quarterly loss of $ 6.7 million.
Crompton spokesman Robert Harwood said the company would continue to look for cost savings from Davis-Standard, although these would not be on the same scale as the cutbacks the firm already has experienced.
Referring to the closure in Britain, Ackley said it made sense to centralize extruder production in Davis-Standard's large, well-equipped plant in Erkrath, Germany, and close the smaller former Betol Machinery Ltd. facility in Luton.
Davis-Standard sees potential for new business in Europe, where Ackley said the fall-off has been less marked than in North America.
As for the U.S. cuts, he said it made no sense operating two plants 10 miles apart in New Jersey.
"We are positioning ourselves to deal with the economy as it is and to be competitive," said Ackley.
The leased plant at Edison had employed 60. Thirty-two of those employees transferred to Somerville. In England, Davis-Standard is retaining 14 service, sales and design engineering personnel at Luton, down from the plant's original complement of 66.