Huntsman Corp. is the latest plastics and chemicals maker to announce massive job cuts. The Salt Lake City-based firm said Jan. 22 it would eliminate almost 1,200 positions by the end of 2009.
The cuts will be spread across all divisions and functions, and represent more than 9 percent of the global work force of Huntsman, a major producer of polyurethanes and other specialty materials.
The company also will eliminate almost 500 contractor positions and close a 200-employee plant in Grimsby, England, making titanium oxide a pigment commonly used in plastics.
The job cuts will create $150 million in savings, while the plant closing will generate another $28 million in savings, officials said in the release. Huntsman also is reducing its 2009 capital expenditure budget to $230 million a 45 percent drop vs. 2007.
Officials said that the Grimsby plant with annual capacity of almost 90 million pounds was ``the [pigments] division's oldest and least efficient manufacturing facility.''
Huntsman is working to rebound from the collapse of its planned merger with Hexion Specialty Chemicals Inc. The deal fell apart late last year when Hexion investor Apollo Management LP balked at the original purchase offer of $10.6 billion. Huntsman received a $1 billion breakup fee after the deal fell through. Huntsman officials said Jan. 7 that the breakup fee would be used to reduce debt and increase liquidity.
Huntsman also is continuing its lawsuit against financial firms Credit Suisse and Deutsche Bank for their roles in the aborted deal. Huntsman is seeking a multibillion-dollar settlement in that case, which is being tried in a Texas state court.
In the first nine months of 2008, Huntsman's sales increased 14 percent vs. the year-ago period, to almost $8.2 billion. The firm posted a profit of almost $11 million in that period, after losing $174 million during the same period in 2007.
Huntsman's PU sales climbed 15 percent to almost $3.3 billion during that period, although the unit's pretax profit tumbled 18 percent.