LyondellBasell Ups Cost Reduction Target; 17% of Jobs To Be Cut
April 10, 2009
LyondellBasell on Friday announced that it has increased its fixed-cost reduction target to $700 million by year-end 2010. The new target is part of a total performance improvement plan of $1.3 billion, which also encompasses variable and energy cost reductions, as well as revenue enhancement initiatives.
"The original merger plan targeted a fixed-cost reduction of approximately $200 million. Based on our efforts through the second half of 2008 and particularly in the first quarter 2009, we have increased our goal to $700 million," said Ed Dineen, LyondellBasell's Chief Operating Officer. "More importantly, we believe we will demonstrate a substantial part of this target in the 2009 bottom line, given first-quarter performance."
The plan encompasses a reduction in employee headcount of more than 3,000, or approximately 17 percent, and a reduction in contractors approaching 2,000, or nearly 30 percent. It includes the closure of 20 offices and research & development sites and the closure of 10 or more manufacturing plants, most of which have been announced or completed. "The detailed program identifies actions and timelines, and implementation is well under way as momentum built rapidly throughout the first quarter," said Dineen.
"This cost reduction plan is a key part of our effort to offset the current sales volume and margin weakness. It will also be incorporated into the financial projections that will inform our Plan of Reorganization," said Alan Bigman, LyondellBasell's Chief Financial Officer. "We are working toward confirmation of a plan consistent with the milestone schedule set forth in our debtor-in-possession loans."
"Market conditions continue to be extremely challenging, and we are driving hard across all our organizations to enhance our earnings," said Dineen. "We are pleased with our progress, but are committed to doing more and doing it more quickly. I am confident that we will emerge from Chapter 11 as a stronger, more competitive company that will continue to be a leader in innovation, customer satisfaction and the manufacturing and development of products that improve quality of life for people around the world."
LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. It is the global leader in polyolefins technology, production and marketing; a pioneer in propylene oxide and derivatives; and a significant producer of fuels and refined products, including biofuels. Headquartered in The Netherlands, LyondellBasell is privately owned by Access Industries.
Source: LyondellBasell Industries
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