Rohm & Haas to Close 2 O.C. Plants, Cut Jobs
Rohm & Haas Co. will fire as many as 1,260 employees--including 100 in Orange County--to cut costs as the Philadelphia specialty chemicals maker tries to counter falling demand for its plastics and chemical products.
The company, which makes paint additives and chemicals for electronics and also owns Morton Salt, said the job cuts will apply across its businesses and reduce its 18,000-employee work force by 7%.
Rohm & Haas said in a statement that the reductions will save at least $200 million by the end of next year. Some of the job reductions will be tied to two plant closings in Orange County and one in Mississippi, said spokeswoman Laura Hadden. It also plans to close a warehouse in Freeport, N.Y.
At its Tustin plant, which makes chemicals for the printed wiring board industry, 75 positions will be eliminated over the next eight months, and 20 other employees will be transferred to other sites, Hadden said.
In Orange, 25 employees, who make an electronics chemical product the company is discontinuing, will be laid off. Both Orange County plants will be closed.
Raj Gupta, the company’s chairman, said in the statement that the company has been hurt by a “sharp decline” in the electronics industry, where its chemical products are used in the wiring and circuit boards of electronics, including personal computers, video games and cellular phones.
“The external economic environment of the last 12 months has sharpened our resolve to make Rohm & Haas a less complex company,” Gupta said.
Shares of Rohm & Haas rose 58 cents to $34.83 on the New York Stock Exchange. The shares have fallen 9.8% in the past 12 months.
“This company faces severe head winds and, as a result, has to aggressively cut costs,” said Tim Gerdeman, an analyst with Lehman Bros.
The company also makes additives for construction products, such as vinyl siding, as well as automotive coatings. Both construction and auto sales have slowed in the U.S. in recent months.
The company expects to take a second-quarter charge against earnings to account for the severance costs and asset write-downs, said Hadden. The charge will be less than the $750 million after taxes that Rohm & Haas expects to get from the sale of its farm chemicals business to Dow Chemical Co., she said.
Times staff writer Bonnie Harris contributed to this report. Associated Press and Bloomberg News were used in compiling it.
