As part of its strategic plan to strengthen its core business, increase efficiency and generate growth, Libbey Inc. will freeze company contributions to its cash balance pension plan for US salaried associates as of 1 January 2013. Staffing reduction savings are expected to begin in mid-2013.
Libbey Inc., as part of its strategic plan to strengthen its core business, increase efficiency and generate growth, has announced modifications to the company’s retirement benefits for its US salaried associates. The company also announced an additional reduction-in-force of its US salaried staff, bringing the total planned reduction, including those announced in July 2012, to approximately 9% of its global managerial, professional and administrative workforce. The benefits and staffing changes announced this quarter are estimated to reduce annual expenses by more than USD 10 million annually (based on certain actuarial assumptions).
To address rising pension costs, Libbey will freeze company contributions to its cash balance pension plan for US salaried associates as of 1 January 2013. All pension plan participants will retain their accrued pension benefits. The company will offer salaried associates an improved 401(k) benefit that includes an increased company match. Effective 31 December 2012, Libbey will also end its existing healthcare benefit for salaried retirees age 65 and older and, instead, provide a Retiree Health Reimbursement Arrangement (RHRA) that supports retirees in purchasing a Medicare plan that meets their needs.
“These changes represent an important step in reducing US costs and will further strengthen our balance sheet and financial position,” said Stephanie Streeter, chief executive officer of Libbey Inc. “We are committed to making our operations as efficient as possible, while still offering associates and retirees competitive benefits. We have achieved both with these benefits changes.”
In July, Libbey announced a new strategic plan designed to further strengthen its core business and enable the company to improve profitability and realize growth opportunities. The new strategy is specifically aimed at better leveraging Libbey’s key lines of business, improving service to customers, maximizing market opportunities and increasing Libbey’s efficiency. As part of the July strategy announcement, Libbey outlined a new regionally focused leadership structure and reorganization that resulted in a 5% reduction of its global managerial, professional and administrative workforce.
“Decisions to eliminate jobs are very difficult to make, but they are necessary in order to reduce our costs, adjust staffing resources to support the new strategy and better position Libbey for the future,” Streeter said. The company is providing impacted associates with severance benefits and outplacement assistance.
Savings from the benefits changes are expected to begin in January 2013; staffing reduction savings should begin in mid-2013.
The announced changes will not impact Libbey’s customer service or offerings.
Based in Toledo, Ohio, since 1888, Libbey Inc. is the largest manufacturer of glass tableware in the western hemisphere and one of the largest glass tableware manufacturers in the world. It supplies products to foodservice, retail, industrial and business-to-business customers in over 100 countries, and is the leading manufacturer of tabletop products for the US foodservice industry.