Toolmaker announces 700 job cuts

Black & Decker move tied to Pentair merger

Two factories to be shuttered

Action could signal shift to offshore production

October 20, 2004|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

Black & Decker Corp. said yesterday that it plans to eliminate as many as 700 more jobs and close two factories as it merges its global operations with those of Pentair Inc.'s Tools Group, which Black & Decker acquired this month.

The job cuts include up to 20 professional tool engineering positions at Black & Decker's Towson headquarters through layoffs, voluntary severance packages and transfers, the company said yesterday. A company spokeswoman said fewer than 10 of the 1,300 headquarters employees were laid off.

The tool maker expects the $775 million deal with Pentair - Black & Decker's biggest acquisition in more than a decade - to help it sell more power tools to the booming commercial construction industry.

Analysts have applauded the acquisition as a good fit for the nation's top power tool manufacturer, and they said yesterday that plans for layoffs and plant closings were to be expected. Shares of Black & Decker rose $2.39 yesterday, closing at $79.20.

"The acquisition of that business essentially doubled the size of our professional power tools business, and naturally there would be some overlap in some of the types of jobs that are being done in both organizations," said Barbara B. Lucas, a Black and Decker spokeswoman.

The tool maker appears to be following a path with Pentair plants that is similar to the one it has followed with its own in recent years, moving production to lower-cost plants, some of them overseas, analysts said.

"As they look for synergies and streamline the business, that's pretty typical for a lot of these acquisitions," said Bentley Offutt, an analyst with Offutt Securities in Baltimore. "If you're familiar with what Black & Decker has gone through, a number of facilities, including Easton, were closed. Some of those jobs were moved offshore to lower cost locations. That has been the whole story."

The company is in the midst of shifting some of its domestic manufacturing. In addition to the Pentair-related cuts, Black & Decker announced yesterday that it will cut 130 full-time jobs by the end of the year and 200 temporary workers immediately at a Black & Decker plant in Fayetteville, N.C., as part of restructuring announced at the beginning of 2002.

A production line that makes drills, reciprocating saws and motors will be moved to a Black & Decker factory in Reynosa, Mexico, with production of large angle grinders going to a plant in the Czech Republic.

The merger-related job cuts would hit hardest at some of the plants and other facilities Black & Decker acquired from Pentair.

In Jackson, Tenn., the former headquarters of Pentair's Tools Group, the company is eliminating as many as 75 sales, management, marketing and engineering jobs out of a total of 1,800, most of which are in manufacturing and distribution, Lucas said. Those job cuts, including about 50 immediately and 25 by the end of the year, will come from two plants that produce the Porter Cable, Delta and DeVillbiss Air Power brands.

Also in Jackson, the jobs of more than 100 sales representatives for those brands will be phased out by the end of the year.

"We have sales people calling on the exact same customers that Pentair does," Lucas said.

Black & Decker said it will close an Oldham brand accessories plant, formerly run by Pentair, in West Jefferson, N.C., by the end of next year, costing 250 workers their jobs. That plant's circular saw blade products will shift to a Shelbyville, Ky., plant that makes accessories, be out-sourced or be done at Black & Decker plants in China.

The tool maker will close a Porter Cable plant in Suzhou, China, which Pentair recently opened with 225 workers, and move the work to a Black & Decker factory in Suzhou.

Porter Cable's headquarters in Guelph, Ontario, will lose about 30 of its current 45 jobs.

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