Kimberly-Clark, the maker of personal care products such as Kleenex and Scott paper towels, announced last week it would cut 5,000 to 5,500 jobs and close 10 manufacturing facilities.
The status of the company’s plant in New Milford remained uncertain, as the company did not provide specifics on the layoffs or closures other than to say in a release, “The program is expected to broadly impact all of the company’s business segments and organizations in each major geography.”
Kimberly-Clark has operated a tissue mill in New Milford since the late 1950s. It employs about 350 people, making it one of the town’s largest employers.
The company also announced it would sell off some of its low-margin businesses that are “concentrated in the consumer tissue business segment,” according to the release.
The company completed a $28 million expansion of its New Milford plant in December 2014. Kimberly-Clark officials at the time expressed confidence the expansion would keep the company in town for the long term.
Questions to the New Milford Kimberly-Clark location were referred to the corporate office.
“The timing of those (layoff and closure) announcements will be determined by the needs of the business and appropriate consultation and/or negotiations with unions, works councils and other labor stakeholders,” Bob Brand, of the Kimberly-Clark corporate communications office, wrote in an email.
New Milford Mayor Pete Bass said he remained hopeful the local plant would remain in operation.
“Obviously, we hope New Milford does not get impacted,” he said. “The facility is successful, and its co-generation plant makes it efficient and cost-effective. Kimberly-Clark is a good corporate citizen in New Milford.”
The workforce reduction represents about 13 percent of the company’s employee base. The 10 plants to be closed or sold represent more than 10 percent of its manufacturing facilities. The company plans to expand production at its remaining factories.
The company blamed sluggish sales and increased competition for the reductions.
Kimberly-Clark Chairman and CEO Thomas Falk said the restructuring is the biggest the company has undertaken since 2003.
“We believe that, over time, our 2018 Global Restructuring Program will accelerate our return to delivering on our long-term growth objectives,” Falk said in a release.
Kimberly-Clark expects the measures to save the company about $500 million by the end of 2021. It has set an overall target of $1.5 billion in savings from a previously announced cost-reduction program dubbed FORCE, or Focused On Reducing Costs Everywhere.
The company said the reductions will help its “flexibility to invest in its brands, growth initiatives and capabilities critical to delivering future growth,” according to the release.Read Full Article
Kimberly-Clark is a publicly traded company based in Irving, Texas. It owns brands such as Kleenex, Scott, Huggies, Kotex and Depend. The company’s board of directors approved a 3.1 percent increase in the quarterly dividend for 2018, it was announced Tuesday.
The company reported fourth-quarter and year-end 2017 financial results Jan. 23. Net sales in the fourth quarter increased 1 percent to $4.6 billion from the same time a year ago, though North American sales fell 2 percent. Full-year net sales also rose slightly to $18.3 billion. The company expects 2018 sales to increase 1 to 2 percent.
“Although we expect market conditions will remain challenging in the near-term, we plan to deliver better results in 2018 while we begin to implement our new restructuring,” Falk said in a release. “We will also continue to allocate capital in shareholder-friendly ways.”