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 Hamilton Camco - Nov, 18 2004
 Camco Closure Nov, 18 2004
 Employee severance costs
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Posted - 03/27/2010 :  22:49:52  Show Profile  Visit Mac's Homepage  Reply with Quote
Appliance maker Camco says its fourth-quarter loss jumped to $53.4 million after the company recorded costs totalling $77.6 million for the previously announced shutdown of its Hamilton plant.
Almost 750 people will lose their jobs by the end of the year.

The loss amounted to $2.67 a share for the quarter ended Dec. 31 and contrasted with a profit of $6.1 million or 31 cents per share a year earlier, the company reported late Friday.

Sales declined to $163 million from $182 million. Camco is the largest Canadian manufacturer of home appliances, with operations in Montreal and Hamilton.

In mid-January, unionized workers at the soon-to-be-closed Hamilton plant voted overwhelmingly to accept a closure agreement struck between the Canadian Auto Workers (news - web sites) and the plant owners.

Closure of the factory, 51 per cent owned by U.S. industrial giant General Electric and 20 per cent by Toronto-based GSW, was announced in October.

On the Toronto stock market Friday, Camco shares (TSX:COC - news) rose nine cents to $1.59. The earnings report was issued after markets closed.

Camco said its full-year loss was $52.5 million, compared with net income of $11.1 million for 2002. Mainly as a result of lower export sales, annual revenue declined to $595 million from $665 million.

Camco said GE Consumer & Industrial, its primary export customer, began buying 12-cubic-foot refrigeration models in the second quarter from a lower-cost supplier; sales of dishwashers to GE were reduced; and the strengthening Canadian dollar eroded the value of U.S. sales.

"2003 was a critical transition year for Camco," CEO James Fleck said in a release. "We achieved significant progress towards our goal of becoming GE's principal supplier of dryers in North America, and our Canadian distribution business continued to develop as an innovative marketer of major appliances in Canada."

The decision to close the Hamilton was difficult, he said, but "once we complete the transition challenges of 2004, Camco will be positioned to profitably grow both in Canada and the U.S." With the shutdown, 690 union employees and 56 salaried workers will lose their jobs next December.

A $9-million provision has already been recorded for employee severance costs. The company said it expects a further $18.4 million in severance costs in 2004.

In addition, a pension windup cost of $33.1 million was taken in the fourth quarter, with more expected later this year.

For plant and equipment, the company recorded an impairment expense of $35 million in the fourth quarter. There was also $3.4-million writedown for retail advances.
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