Belden Inc. has announced that it will close its telecommunications cable plant in Kingston, Ont. by September and...
January 10, 2003
Belden Inc. has announced that it will close its telecommunications cable plant in Kingston, Ont. by September and take several additional actions to adjust its product lines and capacity.
The products currently manufactured in the plant will be transferred to other Belden facilities, principally Belden’s communications plant in Phoenix, Ariz. Belden purchased the Kingston plant this past October. The company recorded a liability for severance and other plant closing costs of approximately $13 million at the time of the purchase.
"Due to the severe decline in the demand by all the major North American communications companies, there is significant excess capacity in the industry for telecommunications wire and cable," said president and CEO C. Baker Cunningham. "The closing of the Kingston plant and the other actions we are announcing today are necessary for us to remain competitive. We regret that conditions in the market have resulted in the loss of many good jobs.”
Concurrent with the actions related to the Kingston plant, Belden has conducted a strategic review of its product lines in light of lower levels of demand, technology changes that affect customer needs, and industry trends.
As a result, it will exit manufacturing and marketing of long-line, single-mode fiber optic cable, discontinue certain minor, non-strategic products whose profit
opportunities have become unattractive and dispose of certain excess and inefficient equipment used in the manufacturing of telecommunications cable.
These additional actions will result in charges of $45 million (pre-tax) recognized in the fourth quarter of 2002, or about $1.20 per share (after tax). The non-cash portion of the charge is approximately $34 million and predominantly relates to the write-off of machinery and equipment.
Belden plans to discuss the actions in more detail when it finalizes fourth-quarter results expected at the end of the month.