Georgia-Pacific Corp. will eliminate 850 jobs in North America -- mostly in Wisconsin -- and 250 in Europe as part of a restructuring.
The Atlanta-based manufacturer (NYSE: GP) also said it will idle up to four tissue paper machines. In its international consumer products business, the company plans a reorganization in France and belt tightening in the United Kingdom and the Nordic region.
The initiatives include a restructuring of the company's commercial business by modifying production and distribution processes at its mills in Green Bay; Muskogee, Okla.; and Savannah, Ga.
The largest impact will be at the Green Bay Broadway mill, where the company will close a print shop and label operation, and move most of the mill's warehouse operations to a new product mix center in the Green Bay area. Job cuts at Green Bay account for a little more than half of the targeted 850 layoffs in North America, company spokesman Robert Burns said.
The Broadway mill now has about 2,200 employees. Georgia-Pacific is Green Bay's largest employer with about 3,500 workers in the area.
The initiatives also include recent job cuts at tissue facilities in Plattsburgh, N.Y., Camas, Wash., and Wauna and Halsey, Ore., as well as at the company's Dixie manufacturing facility at Epic, Mich. Georgia-Pacific also plans to shut down tissue converting operations at Old Town, Maine.
Georgia-Pacific expects to take $106 million in charges over the next two years related to the moves, including about $42 million in the third quarter of 2005. However, the company expects the restructuring will allow it to reduce ongoing costs by nearly $100 million a year over the next two years, with about 75 percent of the savings realized in North America.
The company said the reductions in North America are part of an overall cost-reduction strategy to reach a $1.2 billion annual operating profit goal.
The restructuring follows similar moves the company has made in recent years as a result of its Fort James acquisition. Since 2001, the business has shut down nine tissue paper machines, with 170,000 tons capacity, and idled 47 converting lines in the tissue and Dixie businesses. Much of the capacity of these machines and lines was moved to newer, faster assets. In addition, more than 2,250 jobs already have been eliminated.
In the company's international consumer products business, the new restructuring is part of an ongoing program to eliminate costs. Changes already implemented include the closure of one operation in Greece and the closure of two operations in the United Kingdom. Georgia-Pacific's management team in France is directing the shutdown of a paper machine at its Kunheim facility. Management teams in the Nordic region, as well as in Great Britain and Ireland, are directing further investments and rationalization across their businesses to improve operating efficiencies.Atlanta Business Chronicle via The Business Journal of Milwaukee
