Schulman, Sabic IP, Georgia Gulf cut jobs
Weak economic conditions have led Georgia Gulf Corp. and A. Schulman Inc. to cut jobs and production capacity, while a new sales and marketing model has prompted Sabic Innovative Plastics to shed as many as 140 total jobs at three locations.
For Pittsfield, Mass.-based Sabic IP, job cuts are expected at plants in Mount Vernon, Ind., and Parkersburg, W. Va., as well as at the firm's Pittsfield headquarters. Pittsfield will lose 40 jobs, while Parkersburg will shed 14. Cuts in Mount Vernon could reach as high as 86.
Officials with Sabic IP a major producer of polycarbonate and other engineering resins said that the cuts are connected to a new business model that the firm began working on earlier this year. The new model will result in a total of 1,000 job reductions worldwide by the end of 2009. In November, Sabic IP officials said the firm would cut its global engineering resin output by as much as 20 percent.
``As far back as April, we were looking at our business model and how we would grow going forward,'' Sabic IP President and Chief Executive Officer Charlie Crew said in a Dec. 9 telephone interview. ``We took an extensive look at benchmarks, demand and value.
``We're taking a new approach to various industries and serving them with the right level of support,'' he added. ``Certain industries that we serve don't require a lot of service. But some need a lot of service and new ideas and designs. One brush doesn't paint it all.''
The Sabic plan was in place before the global economic slowdown hit. Crew said Sabic officials will monitor the market to see if their plan needs to be adjusted in any way.
``As we were implementing the program, the global slowdown hit,'' Crew said. ``But the economy gives you what it gives you. We have to focus on how to differentiate ourselves from our competition.''
Atlanta-based Georgia Gulf will close permanently its PVC resin plant in Sarnia, Ontario.
The plant operates 450 million pounds of annual resin capacity, but has been operated only intermittently during 2008 as construction-related PVC demand has dried up. Closing the site which Georgia Gulf acquired when it bought Royal Group Technologies Ltd. In 2006 will eliminate 39 jobs.
``We operated the Sarnia facility as a swing plant with the intention of restarting production as soon as the markets recovered and demand improved,'' Georgia Gulf President and Chief Executive Officer Paul Carrico said in a Dec. 8 news release. ``In light of prevailing market conditions, we have made the difficult decision to permanently close this facility in an effort to better match our supply with the realities of the marketplace.''
A Georgia Gulf spokeswoman added that the Sarnia site's size, logistics and age played a role in the decision. The company continues to make PVC at plants in Plaquemine, La., and Aberdeen, Miss.
In the first nine months of 2008, Georgia Gulf's sales were flat vs. the year-ago period at $2.4 billion, but the firm posted a loss of almost $59 million. It had lost $39 million in the same period in 2007. On Wall Street, Georgia Gulf's per-share stock price began the year around $6.50, but was near $1.50 in early trading Dec. 10.
At Schulman a leading compounder and distributor based in Fairlawn, Ohio about 160 jobs will be lost in North America and Europe, officials said in a Dec. 10 news release.
In North America, Schulman will close a production line and idle two others in Bellevue, Ohio; and will idle a line and reduce weekly operations from seven days to five in Nashville, Tenn. Total production at the plants will be reduced by 50 percent and a total of 60 jobs will be cut. Almost 25 additional jobs will be cut from the firm's sales, marketing, administrative and technical customer service areas.
In Europe and at Schulman's Chinese plant production capacity will be reduced 7-10 percent and 80 positions will be eliminated. The combined North American and European moves are expected to result in annual savings of $14 million to $18 million.
``We are pursuing these restructuring steps at an accelerated pace in response to the continued deterioration in global markets, which has led to weakening sales in both North America and Europe,'' said Schulman Chairman, President and Chief Executive Officer Joseph Gingo. Schulman's sales in fiscal 2008 which ended Aug. 31 were up 11 percent to almost $2 billion, but annual profit tumbled 18 percent. The firm generates about 75 percent of its sales from outside North America, primarily Europe.
On Wall Street, Schulman's per-share stock price was near $24 in late August, but stood at $16.15 in early trading Dec. 10.