Brunswick to Close Plants, Cut 1,400 Jobs

Brunswick Corp., the world's largest maker of recreational boats, withdrew its full-year profit outlook recently and said it would accelerate the closure of four plants already set to be shut as the global economic turmoil further erodes already poor sales. The company also said it would temporarily suspend production at 3 other boat plants for the rest of the year, starting later this month, to deal with what it characterized as the "extraordinary developments within the global financial markets that are affecting the recreational marine market." The news sent Brunswick's shares down as much as 22% recently. Brunswick said the moves, that will result in the letting go of 1,450 hourly and salaried workers, but reduce fixed costs by $300M, will require it to book pretax restructuring charges of between $200 million and $220 million pretax, $180 million of that in 2008. The company also warned it would take $496 million in pretax charges in the third quarter to reflect impairment of goodwill and indefinite-lived intangibles. Until now, Brunswick has continued to enjoy strong sales outside the U.S., thanks in part to the dollar's weakness. But with the world now plunged in the worst credit crisis since the Great Depression, areas outside the U.S. can no longer be counted on to offset softness here. The company has already closed several factories, including plants in Aberdeen, MS and Antigo, WI and lowered production rates at others. The plants affected by the recent announcement are in Pipestone, MN, Roseburg, OR and Arlington, WA, which will all be closed permanently months ahead of schedule; and one in Navassa, NC, which will be mothballed indefinitely. The Arlington, Navassa and Roseburg shutdowns are expected to be completed by the end of 2008, with the Pipestone shutdown completed during the 1st-Q of 2009.