Libbey Inc. Announces Cost Reduction Measures For U.S. Operations
-- Company Implementing U.S. Retirement Benefit Changes and Additional Staffing Reductions --
TOLEDO, Ohio, Sept. 13, 2012 /PRNewswire/ -- Libbey Inc. (NYSE MKT: LBY), as part of its strategic plan to strengthen its core business, increase efficiency and generate growth, today announced modifications to the Company's retirement benefits for its U.S. salaried associates. The Company also announced an additional reduction-in-force of its U.S. salaried staff, bringing the total planned reduction, including those announced in July 2012, to approximately nine percent of its global managerial, professional and administrative workforce. The benefits and staffing changes announced this quarter are estimated to reduce annual expenses by more than $10 million annually (based on certain actuarial assumptions).
To address rising pension costs, Libbey will freeze company contributions to its cash balance pension plan for U.S. salaried associates as of January 1, 2013. All pension plan participants will retain their accrued pension benefits. The Company will offer salaried associates an improved 401(k) benefit that includes an increased Company match. Effective December 31, 2012, Libbey also will end its existing healthcare benefit for salaried retirees age 65 and older and instead provide a Retiree Health Reimbursement Arrangement (RHRA) that supports retirees in purchasing a Medicare plan that meets their needs.
"These changes represent an important step in reducing U.S. costs and will further strengthen our balance sheet and financial position," said Stephanie Streeter, chief executive officer of Libbey Inc. "We are committed to making our operations as efficient as possible, while still offering associates and retirees competitive benefits. We have achieved both with these benefits changes."
In July, Libbey announced a new strategic plan designed to further strengthen its core business and enable the Company to improve profitability and realize growth opportunities. The new strategy is specifically aimed at better leveraging Libbey's key lines of business, improving service to customers, maximizing market opportunities and increasing Libbey's efficiency. As part of the July strategy announcement, Libbey outlined a new regionally focused leadership structure and reorganization that resulted in a five percent reduction of its global managerial, professional and administrative workforce.
"Decisions to eliminate jobs are very difficult to make, but they are necessary in order to reduce our costs, adjust staffing resources to support the new strategy and better position Libbey for the future," Streeter said. The Company is providing impacted associates with severance benefits and outplacement assistance.
Savings from the benefits changes are expected to begin in January 2013; staffing reduction savings should begin in mid-2013.
The announced changes will not impact Libbey's customer service or offerings.
About Libbey Inc.
Based in Toledo, Ohio, since 1888, Libbey Inc. is the largest manufacturer of glass tableware in the western hemisphere and one of the largest glass tableware manufacturers in the world. It supplies products to foodservice, retail, industrial and business-to-business customers in over 100 countries, and is the leading manufacturer of tabletop products for the U.S. foodservice industry.
Libbey operates glass tableware manufacturing plants in the United States in Louisiana and Ohio, as well as in Mexico, China, Portugal and the Netherlands. Its Crisa subsidiary, located in Monterrey, Mexico, is a leading producer of glass tableware in Mexico and Latin America. Its Royal Leerdam subsidiary, located in Leerdam, Netherlands, is among the world leaders in producing and selling glass stemware to retail, foodservice and industrial clients. Its Crisal subsidiary, located in Portugal, provides an expanded presence in Europe. The Syracuse China subsidiary designs and distributes an extensive line of high-quality ceramic dinnerware, principally for foodservice establishments in the United States. Its World Tableware subsidiary imports and sells a full-line of metal flatware and hollowware and an assortment of ceramic dinnerware and other tabletop items principally for foodservice establishments in the United States. In 2011, Libbey Inc.'s net sales totaled $817.1 million.
SOURCE Libbey Inc.
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