PPG restructuring plan to save additional $140 million annually
March 16, 2009 – Company expects first quarter adjusted earnings per share between 10 cents, 15 cents PPG Industries has announced that it would implement another business restructuring plan focused on further reducing its global cost structure
Company expects first quarter adjusted earnings per share between 10 cents, 15 cents PPG Industries has announced that it would implement another business restructuring plan focused on further reducing its global cost structure. The company cited global economic conditions, low end-market demand, and acceleration of cost-savings from the integration of the SigmaKalon businesses acquired in 2008 as reasons for the program. The planned actions are expected to deliver pretax cost savings of approximately $60 million US in 2009, growing to an annual run rate of about $140 million thereafter.
“These are sweeping steps that will impact all of PPG’s business segments and regions,” says Charles E. Bunch, PPG chairman and chief executive officer. “We are making significant structural changes to the way we operate our businesses. By implementing this program, we not only will be better able to weather today’s difficult conditions, we also will be a more efficient company coming out of the current economic downturn.” Bunch says that the largest portion of the cost-reduction activity will take place in the company’s automotive OEM coatings and industrial coatings business units, which have been particularly hard hit by severe declines in global end-use market demand.
Last September, PPG announced a restructuring plan that included closing several coatings manufacturing facilities, including those in Clarkson, Ont., Canada, and Geldermalsen, Netherlands. As part of that plan, PPG closed its Owen Sound, Ont., Canada, glass manufacturing facility and idled one float glass production line at its Mt. Zion, Ill., facility. These prior actions are expected to result in pretax cost savings at an annual run-rate of about $100 million by the end of 2009, and a reduction in employment of 1,357.
“We are managing the company decisively through the current global economic downturn,” Bunch says, “with a focus on lowering our cost structure and retaining our strong liquidity position.”