7,000 to Lose Jobs as Borden Unveils Plans to Restructure

Borden Inc., whose Elsie the cow has been an enduring symbol of the milk business, today unveiled a restructuring that will significantly shrink its dairy operations and reduce its work force by 7,000.

Chairman Romeo J. Ventres announced at a news conference that the company will set up an after-tax reserve of about $404 million to streamline and consolidate production over the next two to three years.

The company also intends to pull out of some overcrowded dairy markets to concentrate on the markets where it has been doing well.

As part of the restructuring, which will cause a loss of $300 million to $305 million in Borden’s third quarter, the company will close or sell 65 of its 265 plants worldwide over the next two to three years.

Ventres said the plants to be closed and the dairy markets to be vacated will be identified later.

Many of the planned closings will involve smaller or older plants where production will be consolidated into larger, more modern ones.

Twenty of the closings will involve dairy plants and branches to be sold or closed in non-growth areas.

‘She’ll Be With Us’

Ventres says Borden will stay committed to dairy markets where it is strong.

“We’re very committed to Elsie,” he said. “You may say Elsie’s gone on a little diet here . . . but she’ll be with us,” Ventres said referring to the cow that has symbolized Borden’s dairy business.

Borden, which claims to be the biggest dairy in the world, hasn’t been losing money in the dairy field, Ventres said, adding, “We’re just not making the money we want.” It wasn’t immediately known whether Borden will lose its No. 1 ranking.

Borden’s program will reduce its worldwide employment by about 7,000 from the present 46,000.

Ventres said the goal of the consolidation in its dairy operation and its other planned moves is to make Borden a low-cost producer in each of its six main businesses by 1992.

Ventres characterized Borden’s plans as a continuation of the five-year growth strategy the company has been pursuing since 1986.

In the first phase, Borden boosted its sales about 60%, in part by doubling its snacks business and tripling its pasta business through 77 acquisitions around the world, mostly in food and consumer products. The acquisitions added $3.1 billion to annual sales.

The plan outlined today was twofold.

First, Borden plans cost reductions aimed at increasing profit margins in the areas of business in which the company has been growing rapidly since the mid-1980s.

Borden says it is the world’s leading producer in pasta, dairy, wall coverings and forest products adhesives. It claims to be No. 2 in salty snacks.

Some of Borden’s best-known brands include Wise chips and snacks, such as Cheez Doodles, Eagle Brand dairy products and Classico tomato sauce. It also makes Elmer’s Glue and various paints and varnishes.

The second part of Borden’s plan involves the restructuring of the dairy operations.