Monday, Plastic products maker Myers Industries, Inc. (MYE), said it plans to consolidate production facilities in its material handling and automotive and custom segments that would affect 158 employees. The consolidation, which is part of its previously announced initiative and assessment of resources to better align capacity and reduce operating costs is expected to close by the end of 2009.
Under the consolidation plan, the Akron, Ohio-based company will shut down one injection-mould plant in the material handling segment at its Shelbyville, Kentucky, which employs about 88 people. In the Automotive and Custom Segment, the company will close one blow-molding facility in Reidsville, North Carolina, which employs nearly 70 people.
Myers Industries said it expects to incur total one-time, pre-tax expenses of nearly $10.6 million in connection with the consolidation actions, of which about $7.4 million is related to the Material Handling Segment and $3.2 million is related to the Automotive and Custom Segment. The Company's cash expenses are estimated to be nearly $1.7 million in each segment.
The company also anticipates an annualized pre-tax savings of about $2.5 million related to the Material Handling Segment consolidation, while in the Automotive and Custom Segment, the company anticipates annualized pre-tax savings of around $2.0 million.
Myers said the production from the facilities will be transferred to other Myers Industries operations in North America. The company will also make severance and outplacement support available to affected employees.
President and Chief Executive Officer John Orr said, "The decision to close any facility is extremely difficult because of the people and communities it impacts. However, given the changed economic landscape and to better position our business, it is absolutely critical that we further reduce costs, consolidate facilities and fully utilize our high-efficiency molding capacity to enhance productivity."
MYE is currently trading at $10.11, up $0.01 or 0.10% on the NYSE.
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