Thread: Black & Decker to lay off 700

Apr 25, 2008 2:32 PM (1 hr 26 mins ago) AP

Black & Decker to lay off 700

Towson, Md. (Map, News) - Black & Decker Corp. will lay off 700 employees and close a plant in Arkansas in the wake of a disappointing quarterly report.

The Towson-based toolmaker made the announcement Thursday after reporting that first-quarter earnings were down 37.6 percent from the same period last year.

The company blamed the slumping housing market and the subprime mortgage crisis for many of its woes.

"The U.S. housing downturn and related credit tightening have sharply lowered demand for tools, locksets and faucets," Chief Financial Officer Michael D. Managan said during a conference call with analysts.

The company has begun sending out notices to the 700 people who'll lose their jobs. Of those workers, 250 are in administrative positions and 450 are plant employees, but it hasn't yet specified publicly where all of them work.

Black & Decker is closing its pressure washer plant in Decatur, Ark., which has about 80 employees. An office in Florida that the company acquired in 2006 when it purchased Vector Products will also be shuttered.

Black & Decker employs about 25,000 people worldwide. The impact of the layoffs on the company's Towson headquarters was unclear, but company spokesman Roger Young said "a good number will be in Maryland."

The company reported first-quarter earnings of $1.09 per share, down from $1.61 per share in the same period a year ago. Despite Thursday's news, its stock price closed at $67.89, up $1.07. Shares were down 60 cents to $67.29 in afternoon trading Friday.

Analysts said the company likely had little choice but to make cuts.

"Their costs continue to go up and they haven't really been able to pass that on," said John Kearney, a Chicago-based equity analyst with Morningstar Inc. "It's just a tough environment. You have to cut costs if you're not generating the revenue."

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"Their costs continue to go up and they haven't really been able to pass that on," said John Kearney, a Chicago-based equity analyst with Morningstar Inc.

Unfortunately, I am afraid we are going to see alot more of this. Problem is that they cannot pass the costs onto the consumer because consumers are strapped. Wages have not kept up with cost of living, and most Americans have lived off credit and now that is drying up. With food going up, fuel, utilities, insurances for cars, health, health care costs, etc, there is less and less money to go around. It does not hurt the very wealthy, but has a huge impact on the middle class and the poor.

Black and Decker sucks anyway...they sell nothing but junk.

What a shame another American Icon biting the dust.I quit buying their products anyway since everything I have bought in the last few years was made in China NOT the USA and the quality was not what it used to be so now I buy Japanese tools.

When the choice is in between our importing from China or Mexico I prefer seeing some more of our imports come in from the latter. It means that we will not have to support their education and health and there is greater likelyhood that the Mexicans use components from American factories.

Originally Posted by Americanpatriot

Black and Decker sucks anyway...they sell nothing but junk.

As a Carpenter for 20 years in the buiding industry, I have worked on everything from back porches to high rises and I can tell you without a doubt that Americanpatriot is right. It's almost like this company designs their stuff to break.