Foamex International Inc., having closed two factories, expects to shut down two more and cut a significant number of jobs by the end of the second quarter.
About 90 positions were eliminated when two sites closed during the first quarter, a Foamex spokeswoman said. More jobs will be lost when the other operations are shuttered, although the firm did not say how many or where the plants and workers are located.
Employees involved in the initial cutbacks were notified in early 2002 and given severance and benefit packages, the company said.
The facility and work force cutbacks are part of a cost reduction and long-term profit enhancement plan, called Project Transformation, put in place in early 2002. The flexible polyurethane and polymer foam product maker intends to close eight of its 67 facilities and trim 600 from its work force of 6,000 by the end of 2002 without cutting capacity, the spokeswoman said, adding that ``we're on schedule to meet all other closures.''
Foamex said it will save about $20 million in 2002 and $30 million in 2003 by streamlining production under Project Transformation. It took a $38 million pretax charge against earnings in the fourth quarter of 2001 to cover plant closings, consolidation, severance and expenses.
The Linwood-based company's goal is to reduce costs, spur revenue growth and drive increased long-term profitability and shareholder value, according to another spokeswoman. The cornerstone of the project is converting about a third of its production capacity to the firm's proprietary Variable Pressure Foaming technology over the next several years, she said.
Foamex operates four VPF facilities, which have almost twice the capacity of the company's other factories. The technology allows it to produce no-fatigue foam goods through an efficient, emissions-free manufacturing process, the company said.
The firm also will double its investment in research and development to $6 million this year from $3 million in 2001. In addition, it will increase its sales and marketing investment while it reorganizes and streamlines its shared services and supply chain functions.
The company isn't likely to see the benefits of Project Transformation until the second half, Peter W. Johnson, president and chief operating officer, said in the firm's first-quarter earnings report. The firm's net income fell 24.7 percent in the first quarter to $4.5 million on a 4-percent rise in sales to $314.1 million.
A maker of cushioning for the bedding, furniture, automotive and carpet cushioning markets, Foamex also produces polymers for a variety of applications in the defense, aerospace, industrial, electronics and computer industries.