Noranda Aluminum Holding Corporation today announced a company-wide workforce and business process restructuring that will reduce Noranda’s operating costs, conserve liquidity and improve operating efficiencies. This restructuring is expected to generate cash cost savings and operating efficiencies through the work force reduction of approximately $23 million annually.
“Noranda remains committed to its strategy to improve productivity and grow its business to support our customers, communities, suppliers, co-workers and investors,” said Layle K. “Kip” Smith, Chief Executive Officer and President. “Current economic conditions require that we take accelerated actions to reduce our costs, improve our productivity and conserve our liquidity, so that we can continue to build a long-term sustainable company. This restructuring initiative, which is a continuation of our CORE cost savings and productivity program, will position our company better in the short-term and build a strong foundation for our future.”
The work force restructuring plan involves a total staff reduction of approximately 338 employees and contract workers. The reduction in the employee work force includes 228 affected employees in our upstream business. These reductions will occur during the fourth quarter of 2008 and the first quarter of 2009. The reductions at our downstream facilities in Huntingdon, Tenn., Salisbury, N.C., and Newport, Ark. include 96 affected employees. These reductions will be substantially completed during the fourth quarter of 2008.
It is estimated that these actions will result in one-time pre-tax charges to be recorded in the fourth quarter of 2008 of approximately $7 million to $12 million, primarily due to one-time termination benefits. Substantially all of these charges will result in cash expenditures.