Ferro Corp. has initiated the next step in the restructuring of its European manufacturing operations. As a result of the new initiative, the company will discontinue manufacturing porcelain enamel frit at its Rotterdam, The Netherlands, facility by the summer of 2008 and will consolidate production at other European sites. Employment at the Rotterdam location will be reduced by 84 positions. Ferro will work closely with customers to ensure a high level of customer support through the transition.
The company expects to record a pre-tax charge in the third quarter ended September 30, 2007, of approximately $5.9 million for severance benefits related to the action, pursuant to an agreement reached with workers’ representatives, and asset impairment and other costs. The charge is expected to reduce diluted earnings per share in the 2007 third quarter by approximately $.10. Previously, Ferro had estimated third quarter earnings would be $.17 to $.22 per share.
Ferro expects to record future severance costs, accelerated depreciation and other costs related to this manufacturing consolidation of approximately $17 million through the third quarter of 2008, in addition to the current charges.
The consolidation of frit manufacturing is part of Ferro’s ongoing effort to reduce annual costs in its European manufacturing operations by $40 million to $50 million by the end of 2009.
Additional information is available at www.ferro.com