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Corning to Cut 2,220 Jobs, Take $250-Million Charge

January 10, 1998|From Times Wire Services

Owens Corning, citing pricing pressures in building insulation materials and a shortfall in fourth-quarter earnings, said Friday it would cut 2,200 jobs and take $250 million in charges to restructure.

"Despite our attempts to increase prices in certain insulation markets through the elimination of rebates and other actions, we have been unable to stop our selling price from eroding," Chairman Glen Hiner said in a statement.

In an effort to move production to lower-cost areas, the company said, it will close its fiberglass insulation plant in Candiac, Canada, and scale down composites operations in Battice, Belgium, and a pipe plant in Sandeford, Norway.

Although the price slump is an industrywide problem, analysts said Owens Corning has been slow to cut costs and is hurting worse than competitors.

"Owens has been a little lax," said James Kelleher, an Argus Research analyst. Cost-cutting has "never been a constant" at Owens, the largest insulation maker.

The Toledo, Ohio-based company said it was taking those and other steps in the face of earnings that would fall significantly short of Wall Street expectations.

Owens Corning said it expected to earn about 9 cents a share in the quarter, excluding charges.

Owens Corning also shuffled its top management, saying it would eliminate three executive officer positions at its chief executive office.

Owens Corning stock fell $1.63 to close at $32 on the New York Stock Exchange.

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