Newell Rubbermaid Inc. will close one-third of its 80 manufacturing plants and cut 5,000 jobs, starting in January.
The Sept. 15 announcement was clouded in corporate language and offered few specifics - the Sandy Springs, Ga., company did not say exactly what plants will close, but said they will be announced over the next three years. The plan is designed to ``fuel sustainable growth'' in sales, earnings and cash flow, the company said.
Newell also said it will increase spending on consumer marketing, research and development and international growth.
The plan includes steps to improve the performance of Hudson, Ohio-based rotational molder Little Tikes Co. and injection molder Rubbermaid Home Products Inc. in Fairlawn, Ohio. But Newell Rubbermaid spokeswoman Cari Davidson would not provide details about those operations.
``At this time, we can't provide specifics,'' she said in a Sept. 15 telephone interview. ``This will put us in a better cost position to be able to compete in the global marketplace.''
Newell officials never have defined the company's manufacturing strategy completely. What they are saying now is that they want to ``optimize their geographic footprint.''
The firm already has been busy this year reshuffling Rubbermaid Home Products plants in puzzling moves that included closing one plant and expanding another. In late July, it announced the closure of one facility in Goodyear, Ariz.; that was followed by a layoff in Winfield, Kan., which officials called a regular seasonal move. In August, officials announced a $10.2 million expansion in Centerville, Iowa.
In May, Newell Rubbermaid officials were shopping Little Tikes for sale, according to industry sources.
Newell Rubbermaid expects the plant closings to save money over the long run. The company will spend $350 million to $400 million to make the program happen, and $220 million to $250 million of that will be in 2006 alone. Officials expect to see annualized savings exceeding $120 million when the program ends in 2008.
``Our goal has always been to position Newell Rubbermaid for sustainable growth through powerful brands and innovative new products,'' Chief Executive Officer Joe Galli said in a news release.
The domestic housewares sector has been bleak this year, with several firms filing for bankruptcy protection. A major competitor, Tupperware Corp. of Orlando, Fla., cut 250 jobs at its only U.S. manufacturing plant, in Hemingway, S.C., and announced plans to outsource more manufacturing.
In other Rubbermaid news, the Home Products division announced Sept. 15 that it reached a settlement of a patent infringement lawsuit against Plano Molding Co., based in Plano, Ill.
The Plano site will stop selling plastic shelving products and has agreed to pay Rubbermaid an undisclosed royalty for previous sales of the products, according to Rubbermaid.
Plano officials declined comment.
The lawsuit represents a renewed effort by Rubbermaid to reinforce its intellectual property rights, officials said.