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Champion to cut 2,000 jobs
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October 8, 1997: 10:10 a.m. ET
Company also plans to sell businesses as part of broad restructuring
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NEW YORK (CNNfn) - Champion International announced plans Wednesday to cut 2,000 jobs and sell a range of assets as part of a broad restructuring it says will allow it to return to profitability.
The building material and paper products producer said it hopes to meet the employee reduction targets by the end of 1999. A total of 9 percent of manufacturing jobs will be lost and corporate staff will be cut by 30 percent.
When complete, those moves, combined with divestitures, will reduce Champion's work force by 34 percent, based on a 1996 employee count of 24,400.
The company will divest several product segments including newsprint, recycling, groundwood specialty papers, premium papers, liquid packaging and bleached board. It also will sell 325,000 acres of timberland.
Champion said the moves are intended to improve its annual pre-tax profit from ongoing operations by $400 million within the next three years.
To pay for the restructuring, Champion plans to take a $553 million, or $5.77 per share, charge, most of which will be booked in the fourth quarter of this year.
"With maximizing total shareholder return as our governing objective, we will increase the profit potential of our ongoing businesses and manage our company with greater financial discipline.
"This will mean an improved focus on the customers for our core products, profitable growth and a stronger company that will deliver greater value for our shareholders and a more secure future for our employees," said Champion's Chairman and Chief Executive Officer Richard Olson.
--Cyrus Afzali
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Champion International
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