Summary
This Form 8-K filing from Colgate-Palmolive Company (CL) on June 15, 2005, details a significant step within its ongoing four-year restructuring program. The company announced its intention to outsource bar soap production in the U.S. to a third-party manufacturer, leading to the expected closure of its Kansas City, Kansas facility by late 2006. This strategic move is aimed at enhancing efficiency and competitiveness within the U.S. bar soap market. The projected after-tax charges associated with this specific initiative are approximately $55 million, comprising asset-related costs, employee severance, and other associated expenses. The company anticipates that about 25% of these charges will involve future cash outlays. This action is part of a larger restructuring program, previously disclosed, which has an estimated total after-tax cost of $550 million to $650 million and is expected to yield annual after-tax savings of $250 million to $300 million.
Key Highlights
- 1Colgate-Palmolive announced plans to outsource U.S. bar soap production to a third party.
- 2The Kansas City, Kansas manufacturing facility is slated for closure in late 2006.
- 3This move is part of a larger, previously disclosed four-year restructuring and business-building program.
- 4Total projected after-tax charges for this bar soap initiative are approximately $55 million.
- 5These charges include asset-related costs ($28M), employee-related costs ($19M, subject to union negotiation), and other associated costs ($8M).
- 6Approximately 25% of the $55 million in charges are expected to result in future cash expenditures.
- 7The overall restructuring program's total after-tax cost is estimated between $550 million and $650 million, with projected annual savings of $250 million to $300 million.