Summary
Colgate-Palmolive Company (CL) has filed an 8-K report on October 11, 2005, detailing a significant change in its North American manufacturing network as part of its ongoing four-year restructuring program. The company announced its intention to phase down and eventually cease production at its Jeffersonville, Indiana plant by January 2008. This move is aimed at increasing efficiency and competitiveness by transferring production to a new, state-of-the-art facility and relocating other operations. This restructuring initiative is expected to incur total after-tax charges of approximately $87 million. These charges include asset-related costs (like accelerated depreciation), employee-related costs (such as severance and transition assistance, subject to union negotiations), and other associated costs. While this specific project contributes to the larger restructuring efforts, investors should note that the overall program is projected to cost between $550 million and $650 million after tax, with anticipated annual savings of $250 million to $300 million after tax by its completion.
Key Highlights
- 1Colgate-Palmolive plans to close its Jeffersonville, Indiana manufacturing plant by January 2008, as part of a broader restructuring program.
- 2The closure involves transferring production of Colgate-Total toothpaste to a new, unspecified U.S. facility.
- 3The company anticipates total after-tax charges of approximately $87 million related to this specific plant closure.
- 4These charges comprise $28 million in asset-related costs, $39 million in employee-related costs, and $20 million in other associated costs.
- 5The project is subject to negotiation with the union representing Jeffersonville employees.
- 6This initiative is part of a larger, four-year restructuring program with a total projected cost of $550-$650 million after tax and expected annual savings of $250-$300 million after tax.