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INTER-CITY PRODUCTS CORPORATION ANNOUNCES COST SAVING INITIATIVE

 TORONTO, Jan. 4 /PRNewswire/ -- Inter-City Products Corporation (AMEX: IPR) today announced a program that is designed to reduce operating costs significantly and return the company to profitability.
 The program, undertaken in response to price competition in North American markets for residential and light commercial air conditioning products, includes: mothballing one of the company's three Canadian manufacturing operations; workforce reductions in the U.S. and Canada; wage freezes for all salaried employees; and a significant reduction in selling, general and administrative expenses.
 "There are new dynamics at work in our marketplace," said Arindra Singh, Senior Vice President and Chief Financial Officer. "These initiatives will enable us to continue to meet our customers' demands and be profitable in a competitive marketplace."
 The company said its decision was taken after a comprehensive study of the North American heating and cooling marketplace and a top-down review of every aspect of Inter-City Products' operations.
 As a result of these initiatives, the company's Brantford (Elgin Street) heating and cooling products plant will be inactive, effective Jan. 21, 1994. As well, office and administrative functions at the company's office in LaVergne, Tennessee will be downsized immediately.
 The exact number of employees affected will be determined shortly, but approximately 380 of Brantford's 500 employees will be impacted. As well, in this first phase of restructuring at the company's U.S. head office, approximately 70 jobs in LaVergne, Tennessee will be eliminated. The company's total workforce, employed at the remaining Canadian and U.S. heating and cooling operations, will number approximately 3,100 at the end of January.
 "We recognize the difficulty this program poses to displaced employees on both sides of the border," said Singh. "For that reason, the company will make considerable efforts to help them adjust."
 While the company has not yet finalized the restructuring charge, the company's best estimate is that the cost, which will be reflected in the fourth quarter of 1993, will be approximately $20 million -- on a pre-tax basis. The company expects to recover these costs within the next two years.
 "This is a difficult business decision but it is essential that we reduce our operating and administrative costs to be competitive," said Singh. "We have excess manufacturing capacity that is adding to our cost and forecasts for industry shipments do not support the need for a second major manufacturing facility for the foreseeable future.
 "Today's announcement doesn't represent the end of our cost reduction measures. We will continue to work toward achieving lower operating costs and growing the business."
 Inter-City Products Corporation is one of North America's leading producers of heating and cooling products for residential and light commercial markets. Its shares are listed on The Toronto and American stock exchanges under the symbol IPR.
 -0- 1/4/94
 /CONTACT: Arindra Singh, 416-598-0101; Cameron Turner, 416-598-0101; Derek Warner, 519-753-8471, all for Inter-City/
 (IPR)


CO: Inter-City Products Corporation ST: Ontario IN: SU:

SH -- NY010 -- 8799 01/04/94 09:32 EST
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Publication:PR Newswire
Date:Jan 4, 1994
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