Newell Rubbermaid Inc. is reorganizing its European business in a move expected to save the firm at least $50 million per year.
Atlanta-based Newell Rubbermaid a major producer of consumer and commercial plastic products announced its plan June 17. A news release offered few details, but said the plan aims to lower costs and improve profitability.
The plan represents a critical step in the execution of our global strategy of investing in innovation, brand-building and cost optimization to drive shareholder value, President and CEO Mark Ketchum said in the release.
The plan also will centralize decision-making for European business functions in Switzerland.
Newell Rubbermaid said its EMEA (Europe, Middle East, Asia) business ranks second behind North America in sales. That region generated sales of almost $800 million in 2009, accounting for about 14 percent of total sales. A separate sales total for Europe was unavailable.
Costs for aggregate restructuring and other items related to the plan are expected to be between $90 million and $100 million, most of which will be incurred by the end of 2011. When the change is completed during 2012, it is expected to generate annual savings of between $50 million and $60 million.
Newell Rubbermaid officials could not be reached for comment. The firm ranks as North America's fourth-largest injection molder, with annual sales estimated at $655 million, according to a Plastics News ranking.
The company announced earlier this month it will close an injection molding plant in Macedonia, Ohio, eliminating 155 jobs.
Overall, the firm has closed at least 15 facilities since the end of 2005 and sold 19 others, aiming to produce annual savings of between $175 million and $200 million. In late 2008, it also announced plans to cut its salaried workforce by 8-10 percent.
The first quarter of 2010 was a good one for Newell Rubbermaid, as its sales increased 8 percent to $1.3 billion and its profit grew 73 percent to $58.4 million vs. the year-ago period. For full-year 2009, Newell Rubbermaid had sales of $5.6 billion, down 14 percent vs. 2008. But the firm made a big profit turnaround in 2009, earning $285 million after losing $52 million the year before.
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