PITTSBURGH (AP) -- PPG Industries Inc., which makes paints and coatings, said Thursday it will slash 2,500 jobs and close more facilities as part of a new cost-cutting effort designed to save an additional $140 million a year.
PPG plans to close a paint manufacturing operation at the company's plant in Saultain, France; shutter several smaller facilities across its operations; and reduce staff generally across its operations.
In a statement, Chairman and Chief Executive Charles Bunch said the deepest cuts will occur in its automotive coatings and industrial coatings units, which have experience a steep drop in global demand since the economic downturn.
The planned actions are expected to save about $60 million before taxes this year and increase to an annual run rate of about $140 million after that.
PPG estimated that the plan will cost the company about $160 million in cash. It expects to book a pretax charge of about $190 million, or 88 cents per share, in the first quarter.
Excluding the restructuring charges and other one-time items, the company now expects adjusted first-quarter earnings of 10 cents to 15 cents per share.
Analysts polled by Thomson Reuters, who generally exclude nonrecurring items, forecast quarterly earnings of 27 cents per share.
PPG said it may take an additional charge of up to $50 million later this year once other elements of the restructuring plan are finalized.
In September, PPG announced it would close several manufacturing plants in Canada and the Netherlands to save about $100 million by the end of 2009. The company also idled a float glass production line at its Mt. Zion, Ill. facility.
Thursday, PPG said those previous actions are expected to reduce employment by 1,357 by the end of the year.
In addition, PPG said it is cutting capital spending by about 50 percent in 2009 and expects to lower pension contributions to about $350 million this year from its previous estimate of up to $500 million.
PPG noted that it has also implemented a variety of other cost-cutting measures, including employee furloughs, salary and bonus reductions, and the elimination of its 401(k) matching contributions.
In late January, PPG said its fourth-quarter profit fell 64 percent as the "rapid deterioration in the global economy" cut into its volumes in several segments.
PPG shares gained $1.43, or 4.4 percent, to $34.34 in Thursday trading. The stock has traded between $28.16 and $69.89 during the past 52 weeks.
