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Russell to Cut Jobs, Freeze Pension Plan
By JAY REEVES Associated Press Writer
=A9 2006 The Associated Press
BIRMINGHAM, Ala. - Textile manufacturer Russell Corp. will eliminate
2,300 jobs _ about 15 percent of its worldwide work force _ and freeze
its pension plan.
The job cuts, most of which will come in the U.S., are part of a bid by
Russell to reduce costs so it can continue selling men's fleece
products to Wal-Mart Stores Inc., Russell spokeswoman Nancy Young said
Friday.
The company previously said it lost a contract to sell fleece products
for boys to Wal-Mart, the world's largest retailer. The loss left
Russell with too much manufacturing capacity, making cutbacks
necessary, Young said.
Russell stock closed up $1.08 a share, or about 8 percent, to $14.52 in
trading on the New York Stock Exchange.
In a statement late Thursday, Russell chairman and chief executive Jack
Ward said the cuts were meant to help Russell remain competitive
globally.
"These changes will result in our having fewer, larger facilities,"
Ward said. "We must move quickly to achieve lower costs, both in our
operations and our support areas."
Russell said the company will eliminate about 2,300 jobs from its
global work force of 15,000. About 1,700 of the jobs cuts will be in
the United States, with about 1,250 in Alabama.
Russell said it also would reduce an unspecified number of workers in
Chantilly, Va., and cut about 90 office jobs in its former headquarters
at Alexander City, Ala. and in Atlanta, where the company has been
based since its last restructuring.
About 1,200 of the U.S. jobs will eventually be replaced by hiring in
Honduras and Mexico, the company said.
Russell said it also will freeze its pension plan on April 1. The
company said it would "significantly improve" its 401(k) plan for
employees.
Russell also plans to close a sewing plant that employs about 600
people in Jimenez, Mexico, and said it would move production of Huffy
Sports backboards from Sussex, Wisc., to China, eliminating 85 U.S.
jobs.
After the cuts, Russell will have 2,000 workers in Alexander City,
where it once employed 7,000 people.
Russell said the restructuring would cost as much as $52 million after
taxes, with a yearly pretax savings of as much as $40 million
.
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