The company expects approximately 200 positions to be affected, with most coming from overhead and administrative staff. Staffing at plant facilities will be largely unaffected.
This initiative is expected to generate an ongoing annualized pre-tax cost savings of approximately $30 million, in addition to approximately $25 million in annual pre-tax overhead reductions already implemented in 2011. The initiative, which senior management began developing earlier in the year, was approved by Vulcan's Board of Directors at its regularly scheduled quarterly meeting on Dec. 9, following a preliminary review of the company's proposal at the board's Oct. 14 meeting.
The new organizational structure will allow the company to leverage significant investments in technology that have replaced legacy IT and financial reporting systems. These new systems support improvement in administrative and operating efficiencies while also creating new opportunities for greater standardization and implementation of best practices throughout the organization.
"This consolidation is another important step in our ongoing efforts to optimize operational efficiency and better position the company for improved performance. We are very mindful of the impact this initiative will have on affected employees and will work with them to make this transition as smooth as possible," said Donald M. James, chairman and CEO.
As a result of the consolidation, Vulcan expects to record a charge of approximately $10 million on a pre-tax basis, or $0.05 per share after tax, during the fourth quarter of 2011. This charge will consist primarily of severance costs. Vulcan expects to substantially complete the consolidation in the first quarter of 2012.