Kimberly Clark to close 10 plants, cut 5,500 jobs; mum on Arkansas operations

by Wesley Brown ([email protected]) 3,211 views 

Kimberly-Clark Corp. Kleenex brand facial tissues sit on display for sale at a supermarket in Princeton, Illinois, U.S., on Thursday, April 17, 2014. Kimberly-Clark Corp. is scheduled to release earnings figures on April 21. Photographer: Daniel Acker/Bloomberg via Getty Images

Paper goods giant Kimberly-Clark Corp., which touts popular brands such as Kleenex, Huggies and Cottonelle, announced Tuesday (Jan. 23) a companywide restructuring that will shutter or sell at least 10 manufacturing facilities and force thousands of workers across the globe into the unemployment line.

The Dallas-based paper products conglomerate has manufacturing plants in Conway and Maumelle and a sales office in Northwest Arkansas, but offered no details concerning specific plant closings or jobs cuts. The company on Tuesday reported profits of $3.3 billion on sales of $18.3 billion for 2017.

“Although we expect market conditions will remain challenging in the near-term, we plan to deliver better results in 2018 while we begin to implement our new restructuring,” Kimberly Clark Chairman and CEO Thomas Falk said in a news release.

Kimberly Clark is only two years removed from an earlier job reduction program in 2016 that eliminated thousands of positions worldwide and cut the company’s global workforce by 2%. At the time, when the paper goods giant’s employee count topped 58,000, company officials did not address speculation that dozens of Arkansas production workers were laid off but noted those job cuts largely impacted salaried hires.

Following Tuesday’s announcement, a Kimberly Clark corporate spokeswoman told Talk Business & Politics the company is not providing specifics on the status at any production facilities or the proposed job reductions, beyond what is detailed in the news release or until final decisions are made and announced.

“The timing of those announcements will be determined by the needs of the business and appropriate consultation and or negotiations with unions, works councils and other labor stakeholders,” said Andrea Hopkins, the company’s media representative for the U.S. and Canada.

She said the company has about 700 employees in Arkansas.

Kimberly-Clark and its well-known global brands are sold in more than 175 countries. With brands such as Kleenex, Scott, Huggies, Pull-Ups, Kotex and Depend, Kimberly-Clark holds No. 1 or No. 2 share positions in some 80 countries.

Company officials said the $2 billion global restructuring program will generate annual pre-tax cost savings of $500 million to $550 million through 2021. Those cost savings will be largely driven by job cuts, officials said, which are anticipated to be in a range of 5,000 to 5,500 or 12% to 13% of the company’s employee count of 43,000 in 35 countries.

Other savings will come from manufacturing supply chain efficiencies. The company expects to close or sell 10 manufacturing facilities and expand production capacity at several others to improve overall scale and cost, officials said. As part of the program, Kimberly-Clark expects to exit or divest some low-margin businesses that generate approximately 1% of company net sales concentrated in the consumer tissue business segment.

According to local officials familiar with the company’s Arkansas operations, Kimberly Clark could be spared job cuts in Arkansas because of recent expansions at their locations in central Arkansas. In the past decade, the company’s plants in Conway and Maumelle have invested millions of dollars to add new jobs and make those facilities more cost-effective and efficient, they said.

In July 2010, Kimberly Clark and the Conway Development Corp. announced the Texas company had planned a three-year investment from $25 million to $65 million at the company’s Conway plant. The expansion project added capacity for products that were not formerly produced by Kimberly-Clark in the U.S.

According to local officials, that expansion project added 100 new jobs at the company’s longtime facility in Conway that at one time employed up to 400 workers. Employees at that location on Exchange Avenue produce a variety of feminine, personal hygiene and adult care products.

Down the road at Kimberly Clark’s newer manufacturing facility in Maumelle, the company announced a similar $68 expansion of its baby-wipes facility in 2015, bringing that plant’s workforce to nearly 500 workers. That expansion project was largely funded by two locally-approved bond issues that Kimberly Clark was supposed to pay off later at a low interest rate. According to city officials, that incentive package was expected to add 45 new full-time jobs over a three-year period and expand the company’s sprawling 400,000 square-foot facility by another 40,000 square feet.

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