Glassmaker's Toledo, Ohio-based North American units see increase in profits

Annual operating profits for Pilkington PLC's North American operations increased nearly 11 percent to $30 million on smaller sales in the latest fiscal year as the glassmaker changed focus from restructuring plants to improving operations.

Pilkington's Toledo-based North American operations, including a Rossford plant that has had two float-glass lines rebuilt in recent years, should add $35 million in profit by the end of the next fiscal year, which starts in April, 2003, said Stuart Chambers, chief executive of the British firm.

"Most of that will come through next year rather than this year," he acknowledged during a conference call from England yesterday.

The company's overhead-to-sales ratio in North America has been reduced and is generating $17 million in annual savings, but the effort has stalled, said spokesman Philip Webb. The ratio in North America is at about 20 percent, down from more than 25 percent in 1998, but Pilkington operations in Europe and elsewhere are at about 15 percent, the St. Helens, England, company said.

Overall, the global glassmaker made $106 million on sales of $4 billion in the fiscal year ended March 31. Profits dropped 4 percent from $110 million from the previous fiscal year, while sales declined about half of a percent.

Pilkington, which vowed yesterday it is keeping its 700-employee Toledo area operations intact, began restructuring its North American plants and offices more than three years ago. Locally, the company accepted voluntary retirement two years ago from about 275 employees, many of whom were replaced, and closed an East Toledo technical center after consolidating operations.

The company's North American unit mostly makes glass for cars, light trucks, and commercial buildings and some for aircraft and homes. It closed two U.S. auto-related plants last year. The North American operations had sales of $994 million for the fiscal year, down 2 percent from $1 billion the previous fiscal year.

Pilkington announced this month that its top U.S. executive will leave July 30 and his two positions will be eliminated as management is grouped along product instead of geographic lines. Still, Pat Zito, who will take over part of Warren Knowlton's job and oversee production of glass supplied to automakers worldwide, will have offices in both Toledo and London, Mr. Knowlton has said.

Yet some have expressed concern that Pilkington, which bought Toledo's former Libbey-Owens-Ford Co. in 1986, is planning to move North American administrative operations to North Carolina. Mr. Webb denied that yesterday, saying Pilkington plans to retain the U.S. headquarters in Toledo as well as the Rossford plant and research-and-tooling center near the Toledo and Northwood border.

During the last fiscal year, Pilkington had improved results from its North American building glass operations, but sales of auto glass fell with vehicle production, officials said. It expects those markets to be flat this year.

600450 Glassmaker's Toledo, Ohio-based North American units see increase in profits
Date: 6 June 2002
Source: News Alert

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