Eastman Chemical Co. plans to cut costs by more than $100 million in 2009, mostly in labor-related areas.
Eastman — a major maker of PET and specialty resins — already has reached part of this goal by cutting 40 jobs. Company spokeswoman Tracy Broadwater said in a telephone interview that most of those cuts were management positions at the firm's Kingsport, Tenn., headquarters.
Eastman also plans to reduce use of contractors and part-time labor by an undetermined amount. Other actions detailed by Eastman in a Dec. 17 news release include:
* Elimination of planned 2009 wage and salary increases.
* Permanent change in its U.S. vacation policy by reducing the maximum vacation carry-over amount.
* Elimination of overtime wherever possible.
The firm also temporarily has closed specialty chemical plants in Singapore and Quantan, Malaysia. Both of those plants make specialty chemicals that are used in plastic products, but do not produce resin, Broadwater said.
Actions to reduce nonlabor costs, working capital and capital spending also are being taken.
``Given the sudden and dramatic deterioration of the global economy, we are slowing work on some of our projects as it makes sense to do so,'' Eastman Chairman and Chief Executive Officer Brian Ferguson said in the news release. ``We continue to believe ... that the company is well-positioned to weather this current economic crisis.''
Ferguson is relinquishing his roles May 7 and will be replaced by James Rogers. Ferguson will serve as executive chairman of the firm's board through 2010.
In the first nine months of 2008, Eastman's sales were up almost 6 percent vs. the year-ago period to almost $5.4 billion. Profit zoomed 70 percent to $348 million in the same comparison. Plastic-related sales, however, were down almost 6 percent to $1.6 billion.
Wall Street also has been unkind to Eastman in 2008. The firm's per-share stock price was at $70 in June, but had fallen to $31.20 in early trading Dec. 17.
Eastman has exited a number of foreign PET markets in recent years in order to focus on specialty products such as Tritan-brand copolyester. The firm remains one of North America's largest PET suppliers.