Appliance maker Maytag Corporation announced it expects to close the Florence, South Carolina, U.S. laundry plant, early in the first quarter of 2006. The shutdown will impact approximately 60 employees.
"Closing a plant is never an easy decision," said Steve Ingham, Maytag senior vice president, Supply Chain. "Unfortunately, we have too much laundry manufacturing capacity and we need to reduce it."
Ingham said that the Florence plant closure had nothing to do with employee performance. "Our Florence employees are a hard working and dedicated group, but in today's highly competitive global marketplace, we can no longer afford to keep underutilized plants open."
Maytag said the announcement is part of its efforts to address its manufacturing footprint and remove cost barriers to acceptable financial performance. The company has stated that its excess manufacturing capacity issues and related costs are concentrated in the laundry and floor care product categories.
Besides Florence, Maytag has three other U.S. laundry manufacturing facilities located in Arkansas, Illinois, and Iowa. Earlier this year, Maytag concentrated its production of vertical-axis washers at its plant in Herrin, Illinois, and dryers in Searcy, Arkansas.
Affected employees would be eligible to receive severance packages as well as career counseling services. In addition, Maytag said it will be working with state and local workforce development agencies to help Florence employees make the transition to new employment.
Restructuring charges associated with the plant closing are expected to be in the range of U.S. $40 to $50 million, primarily for asset write-down and accelerated depreciation. The cash portion of these charges is expected to be approximately $10 million related to severance and fulfilling purchase commitments.
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