04 December 2008 15:41 [Source: ICIS news]
HOUSTON (ICIS news)--DuPont will slash 2,500 jobs as part of a restructuring to compensate for a loss of automobile and housing market business, the US major said on Thursday.
“A steep global decline in construction and motor vehicle sales and consumer spending has resulted in declining industrial production, intensified by inventory reductions across most supply chains. These conditions have precipitated a sharp downturn in demand during the fourth quarter,” DuPont said in a statement.
"We have taken immediate and aggressive actions to maximise cash flow by reducing cost, working capital and capital expenditures in response to current market challenges," said DuPont chairman and CEO Charles Holliday. "We will build on our strong financial and market positions and continue prudent financial discipline in navigating through this challenging economic environment.”
He continued: “We are providing 2009 earnings guidance and underlying assumptions in our effort to be as transparent as possible with respect to the current and expected impact of the global recession. We are, however, realistic about the potential for further change and we will adjust actions as conditions warrant."
In addition to the job cuts “certain assets will be rationalised to improve future competitiveness,” DuPont said.
“A pre-tax charge totalling approximately $500m [€395m], or $.40 per share, will be taken in the fourth quarter 2008 for the restructuring plan,” the company said. “These actions are expected to produce a pre-tax earnings increase of about $130m for 2009 and about a $250m annual run rate.”
DuPont said it was taking actions to deliver in 2009 $600m in fixed cost productivity improvements, excluding volume and currency, in addition to about $130m in cost reductions from its restructuring plan.
This compares to an original 2009 cost productivity plan of $200m, the company said.
The company said it expects a loss of 20-30 cents/share for the fourth quarter, excluding an estimated 40 cent/share significant item charge for the company's restructuring plan. On a reported basis, the company expects fourth quarter earnings to be a loss of 60-70 cents/share.
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