Compounder A. Schulman (Akron, OH) will idle two lines and permanently shut down another at its Bellevue, OH site as part of its ongoing restructuring and in response to market conditions, particularly continued weakness in automotive. In addition, the company will idle one line and cut shifts from seven to five days at its plant in Nashville, TN. A. Schulman says these moves will reduce production capacity by 50%, and it also plans to cut headcount at the two sites by approximately 60 from the current total of 172. The company will also realign its North America Engineered Plastics sales, marketing, and technical customer-service teams, reducing staffing there by 15. At the company’s Akron headquarters, the company will cut six full-time and three contract employees. A. Schulman expects the moves to be completed by April 2009, with annualized costs savings of $10 to $12 million expected.
In Europe, the company will cut its current capacity by 7-10%, in addition to a headcount reduction of 50 full-time and 30 contract employees from the total of 1500 in its European operations, including Asia. A. Schulman expects to generate total annualized cost savings of $4-$6 million after taxes with these moves, in a market that represents approximately 75% of its sales.
The company also revised its guidance for the fiscal year ending August 31, 2009, anticipating net income in the range of $30-$35 million, down from a forecast exceeding $37.1 million, which was last year’s total. The company said the 15% reduction in the value of the euro from the end of September to the end of November, resulted in a $10 million hit on after-tax net income by itself, let alone falling demand for its products. Including Asia, North America, and Europe, A. Schulman employs 2200 and operates 16 manufacturing facilities. Fiscal year 2008 revenues totaled $1.98 billion.—firstname.lastname@example.org