West Pharmaceutical Services Inc. said it will lay off 170 workers and close its plant in Montgomery, Pa., that molds plastic components such as stoppers and vials for injectable drugs.
The Lionville firm said the move will improve the company's operating efficiency.
The shutdown will begin in January and continue into the third quarter of 2011 as work is transferred to other plants, mostly in the U.S., West said in a news release.
West also plans to eliminate 150 of the nearly 200 full-time jobs in its St. Austell, England, plant during the next two years.
The company expects a significant portion of the St. Austell plant's business to go away when a current customer contract expires late in 2012. The plant makes molded rubber components for disposable medical devices, as well as rubber and plastic components used in pharmaceutical packaging.
The changing landscapes in the health-care and consumer markets we serve require that we regularly evaluate our operations, Chairman and CEO Donald Morel Jr. said in a news release.
The plans announced today will reduce the manufacturing capacity devoted to product lines that no longer support sustainable, competitive operations, Morel said.
West also said it is restructuring administrative, engineering and other operating positions to eliminate about 50 positions at other company locations, with most of those reductions taking place through attrition and early retirement when possible.
West expects to realize about $6 million in savings from the restructuring in 2011, and annual savings of $12 million starting in 2013.
The charges against earnings from the restructuring will range from $18 million and $21 million, with roughly two-thirds of that amount occurring in the fourth quarter of 2010, the company said.
The Cornwall plant will continue to make a line of unique pharmaceutical packaging, West said. The company also announced it is in negotiations with a third party to acquire part of that facility and supply West's internal needs for certain plastic pharmaceutical packaging components. Upon completion of that transaction, the acquirer would continue to employ 46 current West employees at the site, West said.
West expects 2010 sales to be between $1.095 billion and $1.1 billion. It expects an increase of 3-5 percent in sales in 2011.