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Posted April 4, 2009 | Copyright © The Northern Virginia Daily
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Woodmark closings to claim 600 jobs
Employees will be offered severance packages, transfers
By James Heffernan -- email@example.com
WINCHESTER -- Approximately 600 American Woodmark employees will be offered severance packages as part of the company's plans to shut down three manufacturing plants this summer.
American Woodmark announced Tuesday it will permanently close its plant in Berryville along with one of its production facilities in Moorefield, W.Va. A third plant in Talequah, Okla., will be idled until consumer demand for the cabinetmaker's products improves.
Each of the facilities will cease operations by August, the company said in a filing this week with the Securities and Exchange Commission.
The closings are designed to cut costs in response to the continued housing slump, which has affected both new construction and remodeling sales.
Displaced workers will have the opportunity to apply for open positions at other American Woodmark facilities, the company's director of human resources, Rick Hardy, said in an e-mail Thursday, "and they are all being offered economic assistance through a severance pay and benefits package."
The compensation, together with write-offs of property, equipment and inventory at the three plants, will cost American Woodmark about $17 million, according to the SEC filling, most of it during the company's fourth quarter, which ends April 30.
Long term, the company expects to save approximately $20 million a year.
In a statement issued Tuesday, President and CEO Kent Guichard said current market conditions remain challenging.
"We continue to make choices, sometimes difficult choices, in the best interests of our long term stakeholders," he said. "In this environment, we place a high priority on maintaining the financial strength of the Company."
American Woodmark posted break-even results for its November-January quarter on mostly flat sales of $131.1 million. For the first nine months of its current fiscal year, sales are off 12 percent.
Still, the company's balance sheet remains strong, Guichard said, with low debt and significant cash reserves.
Shares of American Woodmark (Nasdaq: AMWD) closed at $19.29 on Friday, down 11 cents.
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