Facility Closures and Layoff Announcements (Jan. 27-Feb. 2)
A Weekly Listing of Future Corporate Downsizings
This report is excerpted from Watch List, a weekly column of distressed commercial properties, mortgages and corporate news.
Slaughter Overcapacity
Tyson Foods Inc. is restructuring operations at its Emporia, KS, beef plant. Beef slaughter operations will cease within the next few weeks. However, the facility will still be used as a cold storage and distribution warehouse and will process ground beef. The company has no present plans to use the slaughter area of the Emporia plant; however, the equipment there will be left intact. The discontinuation of slaughter operations will result in the elimination of approximately 1,500 of the 2,400 jobs currently provided at the Emporia plant. This will include people employed in first and second shift slaughter, as well as second shift processing. Affected workers will continue to be paid and receive benefits for 60 days.
Now, while I usually don't expand on the plant closing announcements, I found Tysons Foods comments to be enlightening.
"There continues to be far more beef slaughter capacity than available cattle and we believe this problem will continue to afflict the industry for the foreseeable future," said Dick Bond, president and CEO of Tyson Foods. "We estimate the current slaughter overcapacity in the industry to be between 10,000 and 14,000 head of cattle per day."
"This imbalance is especially a problem for Emporia," he said. "Cattle production has moved from eastern to western Kansas over the past twenty to thirty years, and the Emporia plant is no longer centrally located in relationship to where most of the cattle it slaughters are raised."
In addition, the U.S. cattle herd is not growing. Tyson sees no signs of appreciable growth in the fed cattle supply over the next two to three years, which is consistent with the opinions of various industry analysts. The rising price of grain, caused in part by the use of corn for ethanol, has put pressure on feed costs, land costs and the use of farm ground. Further, the number of cows being retained for calf production continues to decline.
"At a time in the cattle cycle when cattle numbers should be at or near their highest, the level of production is not approaching its historic peaks and we do not see any increases in fed cattle production in the foreseeable future," said Jim Lochner, senior group vice president of Tyson Fresh Meats.
Facility Closures and Permanent Mass Layoffs
The number of workers laid off last year, which had been falling since 2001, increased last year. Mass layoff last year totaled 1.58 million, up 7% from 2006. The total was well off the mark of 2001, when 2.57 million people lost their jobs in the aftermath of the Internet bubble burst. The number of workers getting lay off notices has gone up four consecutive months now.
National Semiconductor Corp. will be disposing of certain manufacturing equipment and reducing its workforce at its wafer fabrication facilities. National will eliminate approximately 200 positions, primarily in Arlington, TX; South Portland, ME; and Greenock, Scotland. The departure of terminated employees is expected to begin in the third quarter of fiscal 2008 and should be substantially completed by the end of the fourth quarter of fiscal 2008. The removal and disposal of equipment will begin in January 2008 and should be completed by the end of the 2008 fiscal year.
NewPage Corp. is integrating original NewPage operations and the former Stora Enso North America (SENA) operations. The specific restructuring actions are as follows: - Permanently close the No. 11 paper machine in Rumford, ME, by the end of February 2008. Approximately 60 employees will be affected by the shutdown. - Permanently close the pulp mill and two paper machines, Nos. 43 and 44, in Niagara, WI, by the end of April 2008. Approximately 319 employees will be affected by the shutdown. - Permanently close the No. 95 paper machine in Kimberly, WI, by the end of May 2008. Approximately 125 employees will be affected. And - Permanently close the Chillicothe, OH, converting facility by the end of November 2008 after some of the converting machines and volume are transferred to existing facilities in Luke, MD, and Wisconsin Rapids, WI. Approximately 160 employees will be affected.
Universal Forest Products Inc. intends to close facilities in Stanfield, NC; Gulfport, MS; Elkhart, IN; Westville, IN; and Sanford, NC. UFP does not anticipate needing the operations even when the housing market recovers. Operations from these facilities have been consolidated into plants in New London, NC; New Waverly, TX; White Pigeon, MI; Granger, IN; Bunn, NC; and Emlenton, PA, respectively. The sale of these facilities together with the sale of other excess real estate is expected to generate approximately $38 million in positive cash flow before taxes in 2008.
Albany International's Appleton Wire Division at 5655 Bell Road in Montgomery, AL, is closing down and laying off 96 employees on Feb. 15.
The following future closings and permanent mass layoffs were reported in California.
· Bear Stearns is closing down and laying off 142 employees on Feb. 15 at 1833 Alton Parkway in Irvine.
· Beckman Coulter Inc. is closing down and laying off 158 employees on Feb. 28 at 1050 Page Mill Road in Palo Alto.
· Centinela Hospital Medical Center is laying off 155 employees on Feb. 29 at 555 E. Hardy St. in Inglewood.
· CompUSA Inc. is closing down and laying off 50 employees on Feb. 11 at 750 Market St. in San Francisco.
· Lockheed Martin Space Systems is laying off 60 employees on Feb. 11 at 1111 Lockheed Martin Way in Sunnyvale.
· The Hershey Co. is closing down and laying off 255 employees on Feb. 15 at 1400 S. Yosemite in Oakdale.
· Unified Western Grocers Inc. is closing down and laying off 61 employees on Feb. 13 at 21001 Cabot Blvd. in Hayward.
· Unisys Corp. is laying off 89 employees on Feb. 11 at 25725 Jeronimo Road in Mission Viejo.
· Washington Mutual is laying off 100 employees on Feb. 15 at 17875/17877 Von Karman Ave. in Cypress; another 100 employees at 4920/4940 Johnson Dr. in Pleasanton; another 131 employees at 17861 Von Karman Ave. in Cypress; and 50 employees at 9200 Oakdale Ave. in Chatsworth.
Coleman Cable Inc. is closing down its Woods Industries' operations at 5541 W. 74th St. in Indianapolis, IN, laying off 68 employees by April 25.
Cephalon Inc. intends to transition manufacturing activities at its Cima Labs Inc. facility at 10000 Valley View Road in Eden Prairie, MN, to its recently expanded manufacturing facility in Salt Lake City, UT. As part of that plan some drug delivery research and development activities currently performed in Salt Lake City will move to Cima’s Brooklyn Park, MN, facility. The moves should be completed within two to three years.
The following future closings and permanent mass layoffs were reported in Ohio.
· American Airlines will not relocate its 56,000-square-foot customer reservations center in the Bartlett Bldg. at 36 E. 4th St. in downtown Cincinnati and will lay off 477 employees. According to American Airlines, all tenants in the 232,000-square-foot building have been asked to vacate. American has decided to close those operations permanently. The closure is effective Aug. 15; layoffs begin March 15.
· GE Lighting is closing its Niles Glass Plant at 403 N. Main St. on March 7 affecting 54 employees. Honeywell Autolite is laying off 100 workers at 1600 N. Union St. in Fostoria with the first layoffs to occur March 18 and then roll through January of next year.
· Palm Harbor Homes is closing its production operations in Sabina on March 15 affecting 130 employees.
· Trans World Entertainment Corp. will close its North Canton distribution center at 8000 Freedom Ave. as part of its program to streamline its operations. The operations at the Canton center will be phased out over the next two months and affects 234 employees. Trans World will service its stores from its remaining distribution centers located in Albany, NY, and Carson, CA. Additionally, the company announced the closing of its fixture facility in Johnstown, NY, affecting 18 employees.
The following future closings and permanent mass layoffs were reported in Texas.
· Associated Materials LLC plans to discontinue use of the warehouse facility adjacent to its Ennis vinyl manufacturing facility at 4200 Knighthurst St. In addition, the Company committed to relocating certain vinyl siding production from Ennis to its vinyl manufacturing facilities in West Salem, OH and Burlington, Ontario. The warehouse that is adjacent to the Ennis manufacturing facility was built during 2005 and is currently leased by the company.
· Lineage Power Inc. is permanently reducing the workforce at its facility at 3000 Skyline Drive in Mesquite. It is eliminating 100 positions; layoffs began Jan. 15,2008 and will continue through Oct. 31.
The following future closings and permanent mass layoffs were reported in Virginia.
· SLM Corp. (Sallie Mae), the largest U.S. college- loan provider, is eliminating 350 jobs and seeks to cut 20 percent of its operating expenses to combat rising borrowing costs and shrinking federal subsidies to lenders. The workforce reduction equals about 3 percent of the lender's 11,000 employees, with layoffs in 26 locations, including the Reston headquarters.
Sprint Nextel Corp. in Reston, plans to streamline its business as part of an ongoing review of its operations and market approach. These plans call for job reductions across the company including approximately 4,000 internal positions and reduced utilization of outsourced services and contractors. The company also expects to eliminate more than 4,000 third-party distribution points and to close approximately 125, or 8 percent, of its company-owned retail locations. The company has approximately 20,000 total distribution points, including nearly 1,400 company-owned retail locations.
This report is excerpted from Watch List, a weekly column of distressed commercial properties, mortgages and corporate news.
Slaughter Overcapacity
Tyson Foods Inc. is restructuring operations at its Emporia, KS, beef plant. Beef slaughter operations will cease within the next few weeks. However, the facility will still be used as a cold storage and distribution warehouse and will process ground beef. The company has no present plans to use the slaughter area of the Emporia plant; however, the equipment there will be left intact. The discontinuation of slaughter operations will result in the elimination of approximately 1,500 of the 2,400 jobs currently provided at the Emporia plant. This will include people employed in first and second shift slaughter, as well as second shift processing. Affected workers will continue to be paid and receive benefits for 60 days.
Now, while I usually don't expand on the plant closing announcements, I found Tysons Foods comments to be enlightening.
"There continues to be far more beef slaughter capacity than available cattle and we believe this problem will continue to afflict the industry for the foreseeable future," said Dick Bond, president and CEO of Tyson Foods. "We estimate the current slaughter overcapacity in the industry to be between 10,000 and 14,000 head of cattle per day."
"This imbalance is especially a problem for Emporia," he said. "Cattle production has moved from eastern to western Kansas over the past twenty to thirty years, and the Emporia plant is no longer centrally located in relationship to where most of the cattle it slaughters are raised."
In addition, the U.S. cattle herd is not growing. Tyson sees no signs of appreciable growth in the fed cattle supply over the next two to three years, which is consistent with the opinions of various industry analysts. The rising price of grain, caused in part by the use of corn for ethanol, has put pressure on feed costs, land costs and the use of farm ground. Further, the number of cows being retained for calf production continues to decline.
"At a time in the cattle cycle when cattle numbers should be at or near their highest, the level of production is not approaching its historic peaks and we do not see any increases in fed cattle production in the foreseeable future," said Jim Lochner, senior group vice president of Tyson Fresh Meats.
Facility Closures and Permanent Mass Layoffs
The number of workers laid off last year, which had been falling since 2001, increased last year. Mass layoff last year totaled 1.58 million, up 7% from 2006. The total was well off the mark of 2001, when 2.57 million people lost their jobs in the aftermath of the Internet bubble burst. The number of workers getting lay off notices has gone up four consecutive months now.
National Semiconductor Corp. will be disposing of certain manufacturing equipment and reducing its workforce at its wafer fabrication facilities. National will eliminate approximately 200 positions, primarily in Arlington, TX; South Portland, ME; and Greenock, Scotland. The departure of terminated employees is expected to begin in the third quarter of fiscal 2008 and should be substantially completed by the end of the fourth quarter of fiscal 2008. The removal and disposal of equipment will begin in January 2008 and should be completed by the end of the 2008 fiscal year.
NewPage Corp. is integrating original NewPage operations and the former Stora Enso North America (SENA) operations. The specific restructuring actions are as follows: - Permanently close the No. 11 paper machine in Rumford, ME, by the end of February 2008. Approximately 60 employees will be affected by the shutdown. - Permanently close the pulp mill and two paper machines, Nos. 43 and 44, in Niagara, WI, by the end of April 2008. Approximately 319 employees will be affected by the shutdown. - Permanently close the No. 95 paper machine in Kimberly, WI, by the end of May 2008. Approximately 125 employees will be affected. And - Permanently close the Chillicothe, OH, converting facility by the end of November 2008 after some of the converting machines and volume are transferred to existing facilities in Luke, MD, and Wisconsin Rapids, WI. Approximately 160 employees will be affected.
Universal Forest Products Inc. intends to close facilities in Stanfield, NC; Gulfport, MS; Elkhart, IN; Westville, IN; and Sanford, NC. UFP does not anticipate needing the operations even when the housing market recovers. Operations from these facilities have been consolidated into plants in New London, NC; New Waverly, TX; White Pigeon, MI; Granger, IN; Bunn, NC; and Emlenton, PA, respectively. The sale of these facilities together with the sale of other excess real estate is expected to generate approximately $38 million in positive cash flow before taxes in 2008.
Albany International's Appleton Wire Division at 5655 Bell Road in Montgomery, AL, is closing down and laying off 96 employees on Feb. 15.
The following future closings and permanent mass layoffs were reported in California.
· Bear Stearns is closing down and laying off 142 employees on Feb. 15 at 1833 Alton Parkway in Irvine.
· Beckman Coulter Inc. is closing down and laying off 158 employees on Feb. 28 at 1050 Page Mill Road in Palo Alto.
· Centinela Hospital Medical Center is laying off 155 employees on Feb. 29 at 555 E. Hardy St. in Inglewood.
· CompUSA Inc. is closing down and laying off 50 employees on Feb. 11 at 750 Market St. in San Francisco.
· Lockheed Martin Space Systems is laying off 60 employees on Feb. 11 at 1111 Lockheed Martin Way in Sunnyvale.
· The Hershey Co. is closing down and laying off 255 employees on Feb. 15 at 1400 S. Yosemite in Oakdale.
· Unified Western Grocers Inc. is closing down and laying off 61 employees on Feb. 13 at 21001 Cabot Blvd. in Hayward.
· Unisys Corp. is laying off 89 employees on Feb. 11 at 25725 Jeronimo Road in Mission Viejo.
· Washington Mutual is laying off 100 employees on Feb. 15 at 17875/17877 Von Karman Ave. in Cypress; another 100 employees at 4920/4940 Johnson Dr. in Pleasanton; another 131 employees at 17861 Von Karman Ave. in Cypress; and 50 employees at 9200 Oakdale Ave. in Chatsworth.
Coleman Cable Inc. is closing down its Woods Industries' operations at 5541 W. 74th St. in Indianapolis, IN, laying off 68 employees by April 25.
Cephalon Inc. intends to transition manufacturing activities at its Cima Labs Inc. facility at 10000 Valley View Road in Eden Prairie, MN, to its recently expanded manufacturing facility in Salt Lake City, UT. As part of that plan some drug delivery research and development activities currently performed in Salt Lake City will move to Cima’s Brooklyn Park, MN, facility. The moves should be completed within two to three years.
The following future closings and permanent mass layoffs were reported in Ohio.
· American Airlines will not relocate its 56,000-square-foot customer reservations center in the Bartlett Bldg. at 36 E. 4th St. in downtown Cincinnati and will lay off 477 employees. According to American Airlines, all tenants in the 232,000-square-foot building have been asked to vacate. American has decided to close those operations permanently. The closure is effective Aug. 15; layoffs begin March 15.
· GE Lighting is closing its Niles Glass Plant at 403 N. Main St. on March 7 affecting 54 employees. Honeywell Autolite is laying off 100 workers at 1600 N. Union St. in Fostoria with the first layoffs to occur March 18 and then roll through January of next year.
· Palm Harbor Homes is closing its production operations in Sabina on March 15 affecting 130 employees.
· Trans World Entertainment Corp. will close its North Canton distribution center at 8000 Freedom Ave. as part of its program to streamline its operations. The operations at the Canton center will be phased out over the next two months and affects 234 employees. Trans World will service its stores from its remaining distribution centers located in Albany, NY, and Carson, CA. Additionally, the company announced the closing of its fixture facility in Johnstown, NY, affecting 18 employees.
The following future closings and permanent mass layoffs were reported in Texas.
· Associated Materials LLC plans to discontinue use of the warehouse facility adjacent to its Ennis vinyl manufacturing facility at 4200 Knighthurst St. In addition, the Company committed to relocating certain vinyl siding production from Ennis to its vinyl manufacturing facilities in West Salem, OH and Burlington, Ontario. The warehouse that is adjacent to the Ennis manufacturing facility was built during 2005 and is currently leased by the company.
· Lineage Power Inc. is permanently reducing the workforce at its facility at 3000 Skyline Drive in Mesquite. It is eliminating 100 positions; layoffs began Jan. 15,2008 and will continue through Oct. 31.
The following future closings and permanent mass layoffs were reported in Virginia.
· SLM Corp. (Sallie Mae), the largest U.S. college- loan provider, is eliminating 350 jobs and seeks to cut 20 percent of its operating expenses to combat rising borrowing costs and shrinking federal subsidies to lenders. The workforce reduction equals about 3 percent of the lender's 11,000 employees, with layoffs in 26 locations, including the Reston headquarters.
Sprint Nextel Corp. in Reston, plans to streamline its business as part of an ongoing review of its operations and market approach. These plans call for job reductions across the company including approximately 4,000 internal positions and reduced utilization of outsourced services and contractors. The company also expects to eliminate more than 4,000 third-party distribution points and to close approximately 125, or 8 percent, of its company-owned retail locations. The company has approximately 20,000 total distribution points, including nearly 1,400 company-owned retail locations.
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