MeadWestvaco, a company formed from the merger of The Mead Corp. and Westvaco Corp., will shut down four coated paper machines, resulting in the layoff of 425 workers, the company said yesterday.
Three of the machines are at the company's plant in Chillicothe, OH. The other is at a mill in Luke, MD.
The shutdowns are scheduled to begin in April and finish by May 31. Of the laid-off workers, 350 will be from the Ohio facility and 75 from the Maryland plant.
Company officials said that MeadWestvaco is taking advantage of cost efficiencies gained from the merger of the two mid-sized paper makers, which was completed Jan. 29. The company, which generates $8 billion in sales a year, stands to save $324 million in costs yearly from the merger, including $125 million from its papers group.
“The actions we announced today will provide us with a lower cost and more efficient coated papers platform,” said Ian Millar, president of MeadWestvaco, Stamford, CT. “The closure of high-cost equipment is critical to our plans to create a strong position in our markets, especially in the face of weak economic conditions and import competition resulting from a strong U.S. dollar.”
MeadWestvaco said it expects to slash 900 jobs in 2002, including the cuts from the two mills just announced. Westvaco last year shut a mill in Tyrone, PA, leading to 525 layoffs, and Mead sold its Menasha, WI-based Gilbert Papers subsidiary.
The company projected that it would incur restructuring charges of about $100 million in 2002. MeadWestvaco employs about 30,000 people in 33 countries.
