Springs combines bedding production
December 11, 2000,
FORT MILL, SC -As it modernizes yarn spinning and consolidates some production at two of its bedding plants, a move affecting 320 workers, Springs Industries Inc. said it will record a $1.8 million charge against fourth-quarter profits, picking up the tab for a move that will eventually save the company about $2.2 million a year.
"While we regret having to make the difficult decision to phase out this production, we are going to work diligently to place every affected associate into a job at other Springs facilities in the area," said William Easley, senior vp of Springs and president of manufacturing.
In addition to the outdated yarn spinning that is being eliminated at the Katherine and Elliott plants, some narrow weaving looms, which are incompatible with newer fabrication equipment, will be phased out at the Katherine plant.
Picking up the tab for the modernization project, Springs said it will post a one-time, after-tax charge of $1.8 million, about 10 cents per fully diluted share. The charge includes about $1.1 million related to non-cash asset write-offs, and about $700,000 for severance costs to displaced workers.
The company said the move will ultimately add about $2.2 million a year to after-tax operating profits. Including one-time transition costs and a partial-year benefit, the move is expected to save about $1.1 million in 2001.
As part of an ongoing overhaul of its plants, Springs has invested more than $54 million at its Katherine plant over the past five years to update spinning and weaving. Another $20 million was recently spent at the Elliott plant to add air-jet weaving equipment.