Georgia Pacific Announces Reductions in Production

Georgia-Pacific Corp. recently announced plant closures and indefinite curtailments equaling approximately 45% of the company's gypsum wallboard production capacity in the United States and Canada. "Current market conditions for wallboard are forcing us to take action now to close these facilities and reduce our overall production," said A.D. "Pete" Correll, chairman and chief executive. "These steps are critical for the long-term viability of our wallboard business. Current capacity and pricing levels in the wallboard business are unsustainable and operating our plants at full production is unprofitable for Georgia-Pacific."

Based on analysis of its gypsum wallboard production capacity, the company will close wallboard plants at Savannah, Ga.; Long Beach, Calif.; and Winnipeg, Manitoba, Canada. The company also will indefinitely idle commodity wallboard production lines at Acme, Texas; Sigurd, Utah; and Blue Rapids, Kan.; and reduce operations at its remaining 13 wallboard production facilities to a maximum five-day work schedule for as long as current market conditions exist. In addition, Georgia-Pacific will offer for sale its recycled paperboard plant at Delair, N.J., due to the decreased need for face paper used on the company's wallboard. The company expects to take a charge against earnings in second quarter 2001 of approximately $75 million to cover all costs associated with these actions, including severance and other related costs.