MeadWestvaco to Slash $200 Million in Costs
Paper and packaging manufacturer MeadWestvaco said yesterday it would slash another $200 million in costs in an ongoing effort to make the company more responsive.The cuts, aimed at reducing administrative costs and streamlining warehouse operations, are part of a new business model to let MeadWestvaco react faster to market changes, the Stamford, CT, company said.
The initiative follows a $500 million cost cutback begun by MeadWestvaco in December 2003 involving the elimination of 1,000 employees. That program resulted from a consolidation following the merger of The Mead Corp. and Westvaco Corp., which led to the formation of MeadWestvaco.
MeadWestvaco reported that it took a net loss of $83 million in the second quarter of 2005. All but $13 million of that loss was attributed to the company's printing and writing papers business, which it has discontinued and sold for $2.2 billion.
Increasing energy and raw material costs offset improvements in selling prices during the quarter, MeadWestvaco said. The company said it expected demand to be stronger in the second half of 2005 and that it would seek price increases in response to ongoing increases in material, energy and freight costs.
Scott Hovanyetz covers telemarketing, production and printing and direct response TV marketing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters
