Fluor to Close N.J. Plant, Cut Jobs

Fluor Corp., the largest U.S. engineering and construction company, said it will close its Marlton, N.J., plant by July 1 and cut more than 300 jobs to reduce costs by an unspecified amount.

Fluor’s stock dropped $7.44, or 20%, to close at $30.56 in heavy trading on the New York Stock Exchange. Before Wednesday, its shares had risen 9.4% in the last year.

Late Tuesday, Fluor had said its net income rose 2.3% to $52.3 million, or 69 cents a share, in its fiscal first quarter, in line with analysts’ estimates. Revenue fell 11% to $3 billion, reflecting a decline in new contracts.

H.G. Wellington analyst Wayne Johnson attributed the stock decline to Fluor’s concentration on cutting costs rather than gaining new business.

“They’ve shifted to playing defense, rather than playing more offense,” he said.

Fluor grew too quickly in the early to mid-1990s, and the businesses it entered into weren’t profitable enough, analysts said.

Under Philip Carroll Jr., who became chief executive in July 1998, the company has cut 5,000 jobs, or about 10% of its work force, and focused on fast-growing industries such as biotechnology and telecommunications.

The remaining 120 employees at the closing plant will be offered jobs elsewhere at Fluor. Most of the plant, near Philadelphia, conducts engineering and construction work. It also has part of Fluor’s life-sciences.

Some life-sciences employees will be offered jobs in Greenville, S.C., where Fluor is expanding its biotechnology and pharmaceutical operations.

An unspecified number of administrative workers will be considered for jobs at other locations, the company said.

Fluor also said it plans to keep some employees from its oil, gas and power division in the Philadelphia area to support refiner Sunoco Inc., a major customer. Others will be considered for transfer to Fluor’s power-plant partnership with Charlotte, N.C.-based Duke Energy Corp., Duke/Fluor Daniel.

The Aliso Viejo-based company was hurt in 1998 and early 1999 by slumping oil prices and recessions in Asia and Latin America, which left customers with little to spend to build refineries and chemical plants. Fluor had sales of $12.4 billion last year.

Wednesday’s cuts are most likely the end of the reorganization first announced in March, said Schroder & Co. analyst Richard Rossi, who rates Fluor stock “perform in line.”

“I think you’re at the tail end” of more job cuts, he said.