In this week's issue:
- CEO turnovers skyrocket.
- Plus, a whole new round of major U.S. corporation closures and layoffs were announced this week including such firms as American Express, ArvinMeritor, Ball Corp., Centerline Holding Co., Columbia Sportswear Co., Cooper Tire & Rubber, Dell, Drew Industries, IWCO Direct, Maxim Integrated Products, Motorola, NBC Universal, Tenneco, Time Inc., Washington Post, Worthington Industries and others.
CEO Turnover Skyrockets
As the economy continues its volatile ride, chief executive turnover has reached the highest nine-month total on record and is on a pace to surpass the 2006 year-end record, according to a report by global outplacement and executive coaching consultancy Challenger, Gray & Christmas Inc.
So far this year, 1,132 CEO departures have been announced, a 9% increase from the 1,043 CEO exits recorded through September 2007. At this point in 2006, which saw a record 1,478 CEO changes, departures totaled 1,112.
If CEO changes continue at their current level, we could surpass the 2006 total before the end of November. With many companies, including banks, retailers and manufacturers, at risk of takeover or failure, the odds of further CEO departures are high.
September CEO turnover data showed that 140 CEOs left their posts last month, nearly matching the 144 departures recorded in August. The September total was 25% higher than the 112 CEO exits in the same month a year ago.
Of the 140 CEO departures in September, only 35 were retirements. Forty-four resigned and another 31 stepped down. The health care sector saw the heaviest turnover, with nearly 41% of the 27 September departures resulting from retirement.
Meanwhile, the tumultuous financial sector had 18 CEO changes, with 12 (66.7%) resigning, stepping down or falling victim to bankruptcy and the credit collapse.
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Closures & Layoffs
Adept Technology Inc., will be vacating its headquarters at 3011 Triad Drive in Livermore, CA, over a dispute settlement with its landlord. Adept expects to be out of the facility by Feb. 3.
Align Technology Inc. plans to cut 111 full time positions in Santa Clara, CA, of which 46 positions will be eliminated between now and January 2009. The remaining positions will be eliminated during the next few quarters as the company creates a new shared services organization in its existing Costa Rica operation that will consolidate customer care, accounts receivable, credit and collections, and customer event registration organizations.
American Express in New York is undertaking a companywide reengineering that will eliminate approximately 7,000 jobs or about 10% of the company's worldwide workforce. The reductions will occur across business units, markets and staff groups primarily focusing on management and other positions that do not interact directly with customers. The company is also suspending management level salary increases for 2009 and instituting a hiring freeze for open positions.
ArvinMeritor Inc. in Troy, MI, is executing comprehensive restructuring and cost-reduction initiatives, including exploring strategic alternatives to the spin-off of its Light Vehicle Systems (LVS) business group. During this period, the company consolidated and/or closed 17 of its North American and European manufacturing facilities; divested non-core businesses; reduced its global workforce by approximately 4,000; and implemented a business transformation program. In addition, the company plans more cuts to its global workforce by eliminating another 1,250 employees, or approximately 7%, which is comprised of 450 salaried and 800 hourly positions, including full-time, contract and temporary workers.
Avanex Corp. is implementing a worldwide reduction in force that will result in the termination of approximately 47 employees. In addition, by the end of October 2008, the company intends to close its Melbourne, FL, facility at 1235 Evans Road and transfer the respective product lines, inventory, and fixed assets to either its France or China offices.
Avigen is reducing its staffing level by approximately 27 positions, or 70% of its workforce. In connection with this staff reduction, Avigen has notified the landlord of its building lease for 4,834 square feet of lab space at 1201 Harbor Bay Parkway in Bay City, MI, of its intent to exercise its termination rights and accelerate the expiration date on the remaining lease term to 240 days.
Ball Corp. is closing its metal beverage packaging manufacturing plants in Kansas City, MO, at 1800 Reynolds Ave. The Kansas City plant operates four production lines capable of making 1.1 billion cans in a variety of sizes and employs approximately 180 people. It is expected to close by the end of the first quarter of 2009.
Canterbury Park Holding Corp. is cutting the workforce at its thoroughbred race track and card rooms in Shakopee, MN, roughly 10%, about 60 full and part-time positions.
Centerline Holding Co., parent company of Centerline Capital Group, an alternative asset manager with a focus on real estate funds and financing, is reducing its workforce nationwide by about 20%. A significant part of the restructuring includes shifting resources to enhance its special servicing and asset management functions. The company is in active negotiations with its lenders to implement a debt-financing package to stabilize its finances longer term.
Columbia Sportswear Co., a manufacturer of active outdoor apparel and footwear, is laying off 75, or 4%, of its 1,800 U.S. employees after an 11% decline in orders for spring 2009 and its expectations that U.S. market conditions will remain challenging through 2009.
Conmed Corp. in Utica, NY, has developed an operational restructuring plan to be carried out in the next 12 months. The plan includes constructing a new manufacturing facility in Chihuahua, Mexico; closing of the company's manufacturing facilities in the Utica, and El Paso, TX, and centralizing distribution activities in a new North American distribution center to be located in Atlanta, GA. Anywhere from 150 to 200 positions could be eliminated.
Cooper Tire & Rubber Co. is conducting a capacity study of its U.S. manufacturing facilities over the next couple of months. The study will determine how to optimize manufacturing capacity in relation to developing market and customer needs, and will likely result in restructuring including capacity consolidation or geographical shifts to production. All of the company's U.S. manufacturing facilities are included for review and will be analyzed based on a combination of factors Including long term financial benefits, labor relations and productivity. Cooper has five U.S. manufacturing facilities:
- 701 Lima Ave., Findlay, OH
- 3300 Sylvester Road, Albany, GA
- 2205 Martin Luther King Jr. Blvd., Clarksdale, MS
- 3500 Washington Road, Texarkansas, AR
- 1689 S. Green St., Tupelo, MS
CRA International Inc. in Boston, MA, plans to reduce its consulting staff by approximately 75, including the exit of selected practices, office closures and an office space reduction. CRA is planning to exit the Capital Projects and Legal Business Consulting practices. The company is also closing offices in Austin and Dallas and reducing its office space in Houston. CRA will service those areas from its offices in College Station and Houston. The changes should be completed by the end of the year.
Dell Inc. this week has put in place a hiring freeze and is offering employees voluntary severance packages, as well as one to five days off without pay. Dell also is reducing its use of contract employees, cutting travel expenses and "reprioritizing" some projects and capital spending. Last fall, Dell announced its plans to cut about 8,900 workers.
Dixie Group Inc. in Chattanooga, TN, has developed and begun implementing a plan to consolidate some operations including its tufting operations in North Georgia into its Atmore, AL, facility and its tufting, dyeing and finishing operations in Santa Ana, CA, into one facility. It is also reducing staff by approximately 6% on top of the 9% staffing reduction that took place during the second quarter.
Drew Industries in White Plains, NY, said this week it is renewing its efforts to cut costs. It is currently implementing plans to close or mothball at least five additional manufacturing facilities over the next couple of quarters. In addition, it will continue to explore additional consolidation opportunities. In the last two years, Drew has closed more than 20 facilities. It is in the process of selling five of those facilities, three of which are under contract to be sold before year-end.
Entegris Inc. plans to close the larger of its two manufacturing facilities in Chaska, MN, and will transfer production to its other existing facilities. This closure, which will impact approximately 200 jobs or approximately 7% of its worldwide headcount, should be completed in 2009.
Greatbatch Inc. approved a plan for the closure of its Teterboro, NJ; Blaine, MN; and Exton, PA facilities. This plan includes the transition of the company's Blaine, facility to its 98,000-square-foot facility in Plymouth, MN. Its commercial business will continue optimizing its facility footprint by transitioning production from its acquired facility in Teterboro to its newly constructed Raynham, MA, facility. The third transition relates to the orthopedics business at its facility in Exton, which will be transitioned to other locations not yet decided .
Greif Inc. in Delaware, OH, is exiting three box plants. The assets of its Toledo, OH, plant at 1240 Matzinger Road are being sold to Welch Packaging, and the sheet plant business and assets in Roseville, MI, at 20101 Cornillie Drive are being sold to Aero Box LLC. The business of the facility in Louisville, KY, at 5100 Interchange Way will be absorbed into Greif's regional network, and the plant will be subsequently closed. Together, the plants employ 142. Greif has also sold the assets of its steel pail business in Greenville, OH, at 526 Markwith Ave. to Cleveland Steel Container Corp. Greif will cease production in Greenville on Dec. 19. The plant employs 54.
IWCO Direct, a Chanhassen, MN-based provider of integrated direct mail production services and marketing solutions, plans to close immediately its facility in Elm City, NC, at and will transfer equipment and production operations to three other IWCO Direct facilities in Minnesota. The Elm City facility has 380 employees. Minnesota operations will expand with approximately 250 new positions.
Maxim Integrated Products Inc. expects to close in part or whole its San Jose, CA, fabrication facility at 3725 N. 1st St. and its Dallas, TX, fabrication facility at 4401 Beltwood Parkway South, according to its third quarter financial report. No word was provided on when those might occur.
Maxygen Inc., a biotechnology company in Redwood City, CA, plans to reduce its spending on a breast cancer drug in development while seeking a partner for the program. As a consequence, Maxygen is also terminating approximately 30% of its workforce, with staggered terminations from January 1 through the end of April 2009. In addition, the company has retained the investment bank Lazard to assist in exploring strategic options, including a sale or disposition of one or more corporate assets, a strategic business combination, or other transactions.
Motorola Inc. posted a hefty loss in the third quarter citing the continued troubles of its cell phone division. Because of that, the company will postpone the planned spin-off of the unit, and cut more jobs -- 3,000 jobs by April, with about 2,000 of them coming from the cell phone unit. The company last announced 2,600 job cuts in April.
NBC Universal plans to cut $500 million in spending next year. The reduction would equal 3% of the company's budget. The cuts will come from staffing reductions and cutbacks in budgets for travel, entertainment and promotions.
Tenneco Inc. in Lake Forest, IL, intends to eliminate approximately 1,100 jobs worldwide and close four North America manufacturing facilities and restructure another manufacturing plant in North America. The combination of these closures and other operational and administrative restructuring actions across its global operations will eliminate approximately 500 salaried positions and 600 hourly positions. The North America manufacturing plants identified as recommended for closure include the company's Milan, OH, elastomer facility at 33 Lockwood Road and its Evansville, IN, original equipment (OE) emission control just-in-time facility. The company also expects to close an OE ride control plant and another OE emission control just-in-time facility in the United States, as well as restructure a North America OE emission control plant. The unnamed locations will be announced in the near future. Tenneco had already eliminated approximately 100 salaried positions and 660 hourly positions across its North America earlier this year.
Time Inc., the world's largest magazine company, is expected to cut 6% of its workforce - more than 600 positions. No magazines are scheduled to close, but some are likely to be severely cut back. The company, a division of Time Warner, the media conglomerate that includes CNN, Turner Broadcasting, HBO, AOL and the Warner Brothers movie studio, is facing the twin perils of a shifting media landscape from a severe economic downturn and a loss of readers and advertisers to the Web.
Washington Post revealed that 231 employees accepted its voluntary retirement incentive program offered to some employees earlier this year. The Post also plans to close its College Park, MD, printing plant at 5245 Greenbelt Road in the second half of 2009 and that none of the four presses will be moved to The Post's Springfield, VA, plant..
Worthington Industries in Columbus, OH, will reduce its workforce by nearly 300 through a combination of plant closings and layoffs. Facilities to be closed are in steel processing, the
Louisville, KY, facility at 1152 Industrial Blvd. and in metal framing the Dietrich Metal Framing facility in
Renton, WA, at 3351 East Valley Road. Louisville employs 50 workers and is expected to close by May 31, 2009. The steel processing business segment is also reducing its workforce by 60 seasonal and temporary workers. The Renton facility employs 22 and will be closed by Dec. 31,. The metal framing facility was opened in 2000, but has experienced a decline in demand the past two years. Dietrich Metal Framing is laying off an additional 150 employees across the organization.