MeadWestvaco cuts jobs
reported losses of €8.15 million during the second quarter.
MeadWestvaco, the US-based paper and packaging provider, has reported losses of $8 million (€8.15m) during the second quarter.
In light of the results, the company expects ongoing job cuts to total 2,500 by the end of the year, according to a report in the Dayton Daily News.
The company, along with its predecessors Mead and Westvaco, has eliminated 2,100 jobs since June 2001. The job reductions are part of a larger effort to cut costs at the company, which was formed through a $3 billion merger announced in August 2001.
The company has shut down three paper-making machines and related equipment at its mill in Chillicothe, Ohio. The move resulted in the loss of 350 jobs.
Currently the company employs 33,000.
Management hopes to cut at least $90 million in expenses this year. During the second quarter, the company eliminated $44 million in costs, and officials want to achieve $325 million in cost reductions by the end of 2003.
"The synergies captured in the quarter were a result of a broad range of actions which reduced administrative costs, created significant efficiencies in our coated-paper operations and reduced our manufacturing costs through improvements in purchasing and logistics,"said president and chief executive John Luke.
For the quarter ended 30 June, the company lost $8 million, compared to net income of $24 million, during the same quarter last year.
Before restructuring and merger-related costs, the company earned $13 million, company officials said.
The company posted revenues of $2.01 billion compared to $990 million during the same quarter last year.
For the first half, the company lost $423 million, compared with net income of $40 million during the same period a year ago. First-half results include six months of operations for Westvaco and five months of Mead compared to six months of Westvaco operations in 2001.
In the paper segment, the company reported sales of $35 million and earnings of $45 million for the quarter. Coated paper markets continued to suffer from weak demand and a high level of imports, company officials said. Selling prices continued to decline compared to the first quarter while sales volume remained static.
"We continue to see challenging conditions in the coated paper markets," Luke said. "At the same time, we are encouraged by the solid seasonal improvement we have seen in many of our packaging markets."
