Monday September 17th, 2012 - 1:02PM
As part of a strategic plan to strengthen core business, increase efficiency and generate growth, Libbey Inc., has announced modifications to the company's retirement benefits for salaried associates in the United States. The company also announced additional winnowing of its U.S. salaried staff, bringing the total planned reductions, including those announced in July, 2012, to approximately 9% of the Libbey global managerial, professional and administrative workforce.
The benefits and staffing changes announced should reduce annual expenses by more than $10 million, the company reported.
To address rising pension costs, Libbey will freeze company contributions to its cash balance pension plan for U.S. salaried associates as of January 1, 2013. All pension plan participants will retain their accrued pension benefits. The company will offer salaried associates a 401(k) benefit that includes an increased company match. Effective December 31, Libbey also will end its existing healthcare benefit for salaried retirees age 65 and older and instead provide a Retiree Health Reimbursement Arrangement that supports retirees in purchasing a Medicare plan that meets their needs.
"These changes represent an important step in reducing U.S. costs and will further strengthen our balance sheet and financial position," said Stephanie Streeter, Libbey CEO. "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 strengthen its core business, 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. In its latest strategy announcement, Libbey outlined a new regionally focused leadership structure and reorganization that results 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, the company reported.
Libbey expects savings from the benefits changes to begin accruing in January 2013. Staffing reduction savings should emerge in mid-2013. The announced changes will not impact Libbey's customer service or offerings, according to the company.