Eastman Chemical Company announced a series of actions the company is taking to respond to current economic conditions while continuing to pursue its plans for growth.
The company said that it will reduce costs in 2009 in excess of $100 million, of which approximately $80 million is expected to come from labor-related costs.
Eastman announced the following actions will be taken by early 2009:
- Elimination of planned 2009 wage and salary increases - Permanent change in the company's U.S. vacation policy by reducing the maximum vacation carry-over amount - Elimination of overtime wherever possible - Reduction in use of contractors and part-time labor - Reduction in management staff
The reduction in management staff, which was recently completed, will result in a restructuring charge of approximately $5 million during the fourth quarter. The other actions being taken will not result in restructuring charges.
The company's locations outside the U.S. are taking similar actions to reduce labor costs. In addition, the company is taking actions to reduce non-labor costs, working capital and capital spending.
“We have taken a number of actions over the past several years that better position the company for economic downturns,” said Eastman Chairman and CEO Brian Ferguson. “In addition, the company's flexible workforce structure allows us to quickly and effectively respond to today's challenging economic environment.”
“Given the sudden and dramatic deterioration of the global economy, we are slowing work on some of our projects as it makes sense to do so,” added Ferguson. “We continue to believe, however, that the company is well positioned to weather this current economic crisis, and that we can successfully manage costs while pursuing our plans for growth.”
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