Chemical maker Huntsman today said it plans to reduce its full-time employment by more than 9 per cent or approximately 1,175 positions by year-end, and will also trim an additional 490 full-time contractors.
The Woodlands, Texas-based company said these reductions would save $150 million a year. It also said it would close a plant in Grimsby, UK, which it described as its Pigments Division's "oldest and least efficient manufacturing facility." The closure will result in 200 job cuts and annual savings of $28 million, Huntsman said.
"This restructuring will allow us to improve our business where we most acutely feel the effects of the present global economic slowdown," President and CEO Peter R Huntsman said in a statement. Huntsman also is cutting capital spending plan to $230 million in 2009 from $420 million in 2008.
The restructuring comes after a nearly 18-month long acquisition fight with Hexion Specialty Chemicals. Hexion made a $6.51 billion bid for Huntsman in July 2007. As the economy slid and consumers spent less, Huntsman lost $172.2 million in 2007, compared with a $229.8 million profit in 2006.
Fearing it overpaid for Huntsman, Hexion, which is owned by a private equity firm, tried to break off the deal. Then two banks declined to fund the buyout. After a string of lawsuits and legal maneuvers, Huntsman let Hexion walk away for a $1 billion payout late last year. (See: Chemicals firm Huntsman Corp. receives last tranche of billion-dollar settlement)
The moves announced Thursday should save about $340 million in costs for 2009, Huntsman said. Taken with the $1 billion payout from Hexion, the company said it has "a strong balance sheet and significant liquidity."