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chron.com
Oct. 23, 2002, 5:13AM
Cooper plans to close 10 factories
No decision on which ones
By RALPH BIVINS
Copyright 2002 Houston Chronicle
Cooper Industries plans to shut down 10 factories as a slowdown in the economy has reduced demand for Cooper's tools, hardware and light fixtures.
Cooper, which has 110 manufacturing facilities around the world, has not determined which plants will be closed, a spokesman said Tuesday.
"The broad-based economic recovery all of industrial America keeps hoping for has yet to materialize," Chief Executive Officer H. John Riley Jr. said in a written statement.
The decline in commercial construction is eroding Cooper's fortunes, and that trend may continue for a while.
"At this point, we have no reason to be optimistic regarding fourth-quarter economic conditions," Riley said. "Indeed, we have seen few signs of significant upturn in any of our markets, and activity in the commercial construction sector is likely to deteriorate even further over the near term."
Cooper, which is incorporated in Bermuda and has its administrative headquarters in Houston, has one plant in Houston and 200 people at its office downtown. The plant, in northwest Houston, employs about 200 workers who produce pneumatic hand tools.
Cooper has plants in 33 states, as well as in Mexico, Europe and Latin America.
The company plans to complete the plant closures by the end of 2003, but officials have not determined which plants will be shuttered, said John Breed, a spokesman for Cooper. An undetermined number of employees will be laid off with severance pay when the plants close. The factories likely will be sold or leased to other firms, Breed said.
The decision to close plants appears to be a wise move, given the sluggish economy, said industry analyst Edward Wheeler of Buckingham Research Group.
"It was a necessary action," Wheeler said. "They are sizing the company for the tough times we have right now."
Cooper will take a $30 million charge in the fourth quarter as a result of the closures. The firm will save $35 million a year by 2004 because of the cutbacks.
On Tuesday, the firm announced its results for the third quarter, which ended Sept. 30.
Cooper's net income slipped to $63.2 million, or 68 cents a share, on revenues of $1 billion. That was down from the third quarter of last year, when Cooper had earnings of $74.3 million, or 78 cents a share, on revenues of $1.05 billion.
The company reported success in cutting its tax bill as a result of moving its incorporation to Bermuda. Cooper's quarterly taxes dropped to $19.7 million, from $37.6 million last year.
Cooper's stock on Tuesday closed at $31.70, down $1.28.
Cooper, which had revenues of $4.2 billion in 2001, has about 30,000 employees. |
