Tyco International Inc. is making sweeping operational changes, including a plan to close 30 plastics and adhesives facilities and lay off 1,900 workers in that segment.
The company, based in Pembroke, Bermuda, but operated from West Windsor, N.J., announced the measures as part of a restructuring plan that affects every aspect of the $36.8 billion company.
Officials said during a Nov. 4 conference call that the conglomerate will consolidate to save about $230 million annually by 2005. Among the businesses targeted is its diverse, worldwide plastics and adhesives unit, which includes products ranging from extruded shrink film to injection molded hangers.
For the fiscal year ended Sept. 30, the company recorded sales of nearly $1.9 billion in the plastics and adhesives segment.
Edward Breen, Tyco chairman and chief executive officer, noted that the company was highly acquisitive under previous management while building a large plastics operation.
``We've started a restructuring program designed to shift from a loose federation of independent companies to a lean, integrated, global plastics manufacturer,'' Breen said.
The downsizing of the plastics group will cost the company about $100 million and save about $45 million annually starting in 2005, Breen said. No specific plant closures have been announced.
Overall, the company will close 219 facilities, many of them in its fire and security segment and cut 7,200 jobs. Tyco also announced plans to exit 50 other operations, none of them in the plastics and adhesives unit, and to sell its Tyco Global Network undersea fiber-optic cable operation.
Tyco would like to hike profit in its plastics and adhesives unit, Breen said. Sales were up slightly for fiscal 2003, but profit declined to $167.4 million, down about 20 percent from the year before.
The company's stock rose more than 7 percent by late Nov. 4 on word of the restructuring, trading at $22.54 on the New York Stock Exchange.