Bristol, Conn.-based Barnes Group Inc., a publicly traded molding equipment supplier, is laying off about 430 employees as part of a restructuring plan to offset weak industrial sales in its automotive and tooling markets as well as lower demand for aircraft.
The 163-year-old company and its 5,400 employees generated sales of $1.5 billion in 2019. But first-quarter sales were down 12 percent, and they have continued to slump. The company has had continuous dividends paid for 86 years.
"The unprecedented disruption in global industrial and aerospace end markets brought on by the COVID-19 pandemic necessitates our adjusting costs throughout the company to align with demand," Barnes Group President and CEO Patrick Dempsey said in a news release.
The company's customers include Boeing Co.; Collins Aerospace; Rolls-Royce; Volkswagen; General Motors Co.; Ford Motor Co.; BMW; Johnson & Johnson; Procter and Gamble Co.; and Becton, Dickinson and Co.
The restructuring plan eliminates about 8 percent of the global workforce, which will cost Barnes Group about $18 million in severance packages, but it is expected to save the company $30 million a year.
The workforce reductions will hamper some company locations from a capacity standpoint, William Pitts, investor relations director, told Plastics News in an email.
"However, we have not discussed whether the restructuring will lead to any plant closings," Pitts said.
Barnes Group operates 45 manufacturing sites — 28 for industrial customers and 17 aerospace — as well as 65 sales and technical service sites.
The layoffs will hit corporate staff in both business segments with industrial workers, who make up two-thirds of the company revenue, being impacted more in terms of jobs lost.
"With the continued uncertainty related to the pace of recovery, we have had to make some difficult decisions. Our ability to manage costs allows Barnes Group to remain competitive as we weather the pandemic and best position the company for an economic resurgence," Dempsey said.
Barnes suspended its 2020 forecast in late April, when second-quarter sales were projected to drop about 30 percent compared to the prior year.
The company is divided into industrial and aerospace segments, which comprise 63 percent and 37 percent of its end markets, respectively. The industrial segment includes molding solutions, engineered components, force-and-motion control products and automation, while the aerospace segment includes products for original equipment manufacturers and after-market sales and repairs.
The company says sales to medical end markets — part of the molding solutions unit in the industrial segment, and also includes personal care customers — have remained strong and are expected to remain favorable.
Pitts sees a couple other bright spots.
"As the aerospace industry begins to see resumed flight activity and as industrial customers open/restart their operations, we expect to begin the process of business recovery," he said.
Barnes Group officials said they would update business operations and the end market environment during the second-quarter earnings call scheduled for July 28.