Rayovac Corporation has announced details of its plan to integrate personal care products company Remington Products, LLC, which it acquired in September 2003.
The plan, which entails the closing of several Remington facilities and the integration of all functional departments, will be implemented between March and December of this year. Remington's worldwide operations will be absorbed into Rayovac's existing North American and European business units.
"We are applying the same proven techniques and principles that we used in our very successful VARTA integration to that of Remington," said David Jones , Rayovac chairman and CEO. "By combining the many strengths of our two companies, we are creating a new world-class organization positioned to successfully compete in the global products marketplace and take advantage of a wide-range of growth opportunities."
Rayovac and Remington sales management, field sales operations, and marketing will be merged into a single North American sales and marketing organization combining the expertise and talent of both organizations. The new structure will be launched in mid-February, immediately following Rayovac's global sales meeting.
Remington's finance, information systems, customer service, and other administrative functions will be transferred to the existing counterpart organizations at Rayovac's North American headquarters located in Madison, WI, U.S. The transition is scheduled for the end of March concurrent with the migration of all Remington business transactions into Rayovac's SAP system.
The Rayovac and Remington research and product development functions will be merged into a single organization based at Rayovac's corporate research facility in Madison, WI, U.S. In addition, Rayovac will create a new global product innovation group within the R&D function.
Beginning this spring, all Remington's distribution facilities in North America will be integrated into Rayovac's distribution facilities and infrastructure. Packaging and distribution activities at Remington's third- party-operated facility in Atlanta, GA, U.S. will be transitioned to Rayovac's facilities in Dixon, IL and LaVergne, TN, U.S. In Canada, the Remington distribution center will be closed and all activity transferred to the Rayovac facility in Mississauga, Ontario, Canada.
Most Remington manufacturing activities conducted at the facility will be transferred to Rayovac's manufacturing plant in Portage, WI, U.S. Operations in Bridgeport, CT, U.S. will be phased out beginning in the fall, with the plant closing by calendar year-end.
As a result of these actions, approximately 96 hourly manufacturing and 121 administrative employees will be laid off. Rayovac expects to provide severance packages to all employees not offered continuing employment, as well as outplacement services. Layoffs will begin at the end of March.
Lester Lee, formerly president of Remington North America has been appointed president of Rayovac's combined North American business unit headquartered in Madison, WI. Approximately 100 new professional and administrative positions will be created in Madison to be filled either by transfers of Remington employees or new hires. Approximately 30 new manufacturing positions will be added to the Portage, WI manufacturing facility.
Planning for the integration of Rayovac and Remington international operations is expected to be complete by the end of the first quarter. Also, the 65 remaining Remington U.S. Service Centers will be closed by the end of February. A total of 311 full-time, part-time and seasonal employees will be laid off.
In conjunction with these initiatives and to support its global expansion and diversification strategy, Rayovac will relocate its corporate headquarters to Atlanta, GA, U.S. in the spring of 2004. Executive management, corporate finance, and selected other corporate administrative functions will be relocated. As a result, 25 positions will move to Atlanta.
Rayovac currently expects annualized savings from the integration initiatives to total approximately U.S. $30 million to $35 million and to require one-time cash payments, primarily in 2004, of a comparable amount. Included in these amounts are $8 million to $10 million of projected Rayovac restructuring and related charges that will impact reported earnings in 2004.
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