Sep 24 2010
Armstrong World Industries, Inc. (NYSE: AWI) today announced additional actions in the execution of its European flooring strategy.
The Company will focus on products and regions where it believes it can be a market leader, and will streamline its product range and sales organization accordingly.
Armstrong intends to concentrate its European flooring manufacturing operations in Germany and continue to make linoleum and homogenous vinyl flooring for the commercial market in its Delmenhorst and Bietigheim plants, respectively. During the fourth quarter of 2010, Armstrong plans to withdraw from the residential market (as previously announced in August of this year), and as a result, its Teesside, UK manufacturing facility will likely close. In addition, Armstrong no longer intends to make heterogeneous vinyl flooring in Europe at its Holmsund, Sweden, plant, and it is anticipated that the Holmsund facility will also close. Subject to consultations with employee representatives, the Company anticipates that these restructuring measures will affect approximately 520 jobs across Europe – or about 38 % of Armstrong's European flooring workforce.
In total, the Company expects to incur expenses of $30 million to $35 million for these actions through 2011.; The expenses will primarily include severance benefits and asset writedowns; the amount of severance benefits will be determined following employee consultation periods. Related cash expenditures are expected to be approximately $25 million. The Company expects to realize annual benefits of between $15 million and $20 million from these actions although the full benefit will not occur until 2012.
"We deeply regret that we cannot achieve a sustainable business structure without affecting our employees," said Frank J. Ready, executive vice president, Armstrong World Industries, Inc. "We are committed to our employees and we will do our best to act in the balanced interest of our staff, company, customers and shareholders. We have a clear goal in front of us: we want to be the market leader of specialized flooring in selected markets with a solid foundation for achieving sustainable profitable growth by 2013."
Source: http://www.armstrong.com/