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[October 2007]
Ferro Announces Next Step in European Restructuring
Ferro Corporation (Cleveland, OH, USA) has announced that it has initiated the next step in the restructuring of its European manufacturing operations. As a result of the new initiative, the company will discontinue manufacturing porcelain enamel frit at its Rotterdam facility in the Netherlands by the summer of 2008 and will consolidate production at other European sites.
Employment at the Rotterdam location will be reduced by 84 positions. Ferro will work closely with customers to ensure a high level of customer support through the transition.
The company expects to record a pre-tax charge in the third quarter ended 30 September 2007 of approximately US$5.9 million for severance benefits related to the action, pursuant to an agreement reached with workers' representatives, and asset impairment and other costs. The charge is expected to reduce diluted earnings per share in Q3 2007 by approximately 10 cents. Previously, Ferro had estimated third quarter earnings would be 17 to 22 cents per share.
Ferro expects to record future severance costs, accelerated depreciation and other costs related to this manufacturing consolidation of approximately US$17 million through the third quarter of 2008, in addition to the charges just announced.
The company said that the consolidation of frit manufacturing was part of its ongoing effort to reduce annual costs in its European manufacturing operations by US$40 million to US$50 million by the end of 2009.
ENDS