Corning considers job cuts, partnerships
Corning's vice chairman and CFO James B Flaws has told financial analysts that the company will continue to cut the "fixed-cost structure" in its optical fibre and cable businesses, narrow its product scope in photonics, and consider further job cuts in 2003.
Previously announced restructuring actions to cut costs include cutting the workforce by more than 20% to 23,500; the proposed closure of a fibre plant in Germany; putting on hold fibre operations in Concord, NC, USA; reductions of capacity at equipment locations worldwide; and the permanent closure of its thin-filter manufacturing facility in Massachusetts. These actions are expected to result in more than USD400m in annual savings and a pre-tax restructuring charge of USD500-650m in Q4/2002.
Corning does not not expect significant growth in the telecom business until "late 2004". Telecom activities account for about half Corning's business.
Flaws says that the company is looking at the potential of partnerships, joint ventures or other possibilities. Investment will continue but at a reduced level.
The company's fibre and cable businesses, "are currently cash-flow positive before restructuring charges, and we are working to restore these businesses to profitability," he said.
·Moscow-based oil and gas engineering construction firm OAO StroyTransGaz and Corning Cable Systems (CCS), Munich, have entered into an agreement to build telecoms networks as part of oil and gas projects in Russia and CIS countries.