Ferro Corporation (NYSE: FOE) announced restructuring actions to reduce costs related to the Company's European dielectrics manufacturing after finalizing the consultation process with workers' representatives. This action is the latest restructuring step in a group of projects that were initiated subsequent to Ferro's equity offering in November 2009.
As a result of this action, dielectric products that are currently manufacturing in Uden, the Netherlands, will be transferred to other Ferro locations or discontinued and the manufacturing site will be closed. In total, approximately 120 positions are expected to be eliminated as a result of the restructuring. The actions are expected to be completed by the end of 2010.
"We continue to take actions to optimize our cost structure, and to focus our resources on growing, high-margin opportunities," said Mike Murry, Ferro Vice President, Electronic, Color and Glass Materials.
The Company expects to record net charges of approximately $13 million during 2010, related to the costs of this restructuring action. The charges include approximately $9 million in severance charges and approximately $3 million in site clean-up and shut-down costs. Possible non-cash impairments of the property and equipment related to this restructuring action have not yet been determined. The initiatives are expected to generate pre-tax cost and expense savings of approximately $6 million on an annual basis.