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Emerson Electric announces 4,000 layoffs, 20 plant closings

Monday, October 22, 2001

Associated Press WriterST. LOUIS (AP) -- Emerson Electric Co. will cut 4,000 jobs and close about 20 of its 350 plants worldwide because of a decrease in customer demand and a downturn in the economy partly due to last month's terrorist attacks, the St. Louis-based company announced Monday.

The cuts will affect about 10 percent of the salaried work force, and about 70 percent of these changes have already been made, said Emerson spokesman Mark Polzin.

Polzin would not say where the layoffs will occur or which plants will close. He said more details could be announced Nov. 6, when quarterly and fiscal-year earnings are announced. Polzin said the company will focus the restructuring in the areas of electronics and telecommunications.

This year "has proven to be a challenging year for our businesses," chief executive David N. Farr said. "Economic difficulties that were initially confined largely to U.S. industrial goods and telecom equipment spending have expanded into a broad-based global downturn, and the effects of the Sept. 11 tragedies are adding further impact."

Emerson expects to report operating earnings of $3.01 per share for fiscal 2001, compared to $3.30 a year ago. That excludes a charge of $375 million in the fourth quarter to accelerate cost reductions and better position the company.

Emerson stock was at $49.50 per share in midday trading on the New York Stock Exchange, up 1.25 percent for the day.

In July, the company announced it expected an 11 percent decline in profit for the second quarter and lower full-year earnings for the first time in 43 years.

It cited an "unprecedented" decline in its electronics and telecom business.

Emerson, which had sales of $15.5 billion in the previous fiscal year, has cut its salaried work force by more than 6 percent since the beginning of the year.

Emerson operates in five business segments: process control; industrial automation; electronics and telecommunications; heating, ventilation and air conditioning; and appliance and tools.


On the Net:

http://www.gotoemerson.com.


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