Chemtura Announces Cost Reduction Program
Chemtura Corporation advised that in light of the change in economic conditions, it is implementing a new restructuring program to reduce fixed costs. Chemtura has seen order volumes decline as its customers experience, or anticipate, reductions in demand from the industries they serve. These order reductions primarily relate to Chemtura’s polymer additives and Performance Specialties business segments in electronic, polyolefin, building and construction, and general industrial applications.
In light of reduced demand and with the expectation that the implementation of an upgraded management system will improve the efficiencies of business and management processes, Chemtura will implement a new restructuring initiative to reduce cash fixed costs by approximately $50 million. This initiative involves a worldwide reduction in its professional and administrative staff by approximately 500 people, which represents a reduction of about 20 percent of the professional and administrative population. The cash cost of these actions are provisionally estimated to be in the order of $15 million to $20 million and will be incurred over the next three quarters. The Company will take a restructuring charge in the fourth quarter to record the cost of these initiatives.
The Company is also adjusting its plant production rates to align with customer demand and its inventory reduction goals, and, as a result, is modifying work hours, furloughing or reducing production personnel as required. These actions will create significant additional cost reductions.
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