Libbey cuts 5% of global work force in management

Local firm's decision part of strategic plan

7/19/2012

Toledo's Libbey Inc. said Wednesday it will try to strengthen and grow its business by changing business strategy to one based on regional leadership, instead of global leadership.

The company said it will eliminate 5 percent of its global managerial, professional, and administrative work force in the process.

The number of workers affected was unavailable.

The majority of those affected have been notified. New management changes will take effect Aug. 1, company Treasurer Ken Boerger said.

"We are taking the necessary steps to ensure Libbey thrives in today's competitive market," Stephanie Streeter, Libbey's chief executive officer, said in a statement. "This new strategy will build on Libbey's long legacy and many strengths, and improve the company's competitive position to realize new opportunities across our business."

Under the new strategic plan, which the glassware maker said will "strengthen its core business and enable [Libbey] to improve profitability and realize growth opportunities," the company has created a strategy program management office headed by Richard Reynolds, former Libbey chief financial officer. He was named to the position on Monday.

Libbey said it is reorganizing its leadership structure into three regions -- the Americas; Europe, the Middle East, and Africa; and Asia Pacific.

Daniel Ibele, vice president and general manager for the United States and Canada, and Salvador Minarro, vice president and general manager of Mexico and Latin America, will head up the Americas region.

Gary Moreau, vice president and general manager of Asia Pacific operations, will retain that position.

The company said it is looking for an executive to lead its new Europe, Middle East, and Africa region.

"Libbey is a global company; however, the needs of our customers and suppliers vary by market," Ms. Streeter said. "By aligning regionally, Libbey will be in a stronger position to serve customers across the globe."

Libbey said it expects the new leadership structure to increase efficiency, take better advantage of its key lines of business, improve customer service, and maximize market opportunities.

The company, which last year had a modest 2.2 percent increase in global sales and profits of $23.6 million on global sales of $817 million, said it plans to cut its North American costs by reducing its selling, general, and administrative expenses.

Its new strategy includes maximizing its leadership in businesses such as food service in the United States, Mexico, and in the retail sector.

With factories in Toledo and Louisiana, Mexico, China, The Netherlands, and Portugal, Libbey ships glassware and tableware to more than 100 countries and is the second-largest producer of glassware in the world, behind only ARC International of France.

Libbey said the strategic plan will seek ways to increase profitability and improve its cash generation in its Europe operations, and accelerate sales growth in China.

In addition to its recent successful debt refinancing, which was completed in May, Libbey's new strategic plan calls for attaining a more competitive cost structure.

Ms. Streeter said it was regrettable the company's new strategy resulted in managerial cuts. "These are difficult business decisions, and we regret the impact they will have on the affected associates," Ms. Streeter said.

Libbey said those affected will receive severance and outplacement assistance.

The company's stock, which is traded on the New York Stock Exchange, gained 34 cents Wednesday to close at $15.24 per share.

Libbey's announcement was made after the market's close.