CommScope, a provider of infrastructure offerings for communications networks, said that it plans to discontinue operations at its Connectivity Solutions Manufacturing subsidiary in Omaha, Nebraska and relocate manufacturing to one or more existing CommScope facilities in North America.
CommScope said that it plans to analyse options for its Omaha manufacturing facility in January 2010 and recently finalised its review. The company expects annualised pretax savings of approximately $18m to $22m upon completion of relocation and closure of the facility in late 2011. Approximately one-half of these annualised pretax savings are expected to be realised in 2011, primarily in the second half of the year.
The company expects to incur total pretax restructuring costs of $45m to $53m to complete this facility relocation. Of this amount, cash costs are estimated to be $35m to $40m.
The CSMI subsidiary in Omaha currently employs approximately 400 people, all of whom will be affected by the manufacturing relocation. Another 70 employees in non-manufacturing corporate functions, who are housed in the CSMI facility, are expected to relocate to a new Omaha location prior to the plant’s closing.
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Eddie Edwards, president and chief operating officer of CommScope, said: A combination of difficult circumstances-including facility underutilisation, high labor costs, customers’ spending slowdown and their demand for lower-cost products–is causing CommScope to commit to alternative manufacturing options in order to satisfy customers while protecting the profitability of our business.
We are in the midst of a review of our global manufacturing footprint as we work to improve facility utilisation, minimise cost and improve service to our global customers. As we transition production, we intend to ensure that customers continue receiving the superior service they have come to expect from CommScope.
