Thursday, October 2, 2003

Ashland eliminates 500 jobs

Fewer than 100 to be severed at Covington HQ

By Mike Boyer
The Cincinnati Enquirer

Covington's Ashland Inc., which lost $61 million through the first nine months of this fiscal year, Wednesday said it will eliminate 500 salaried jobs to save $75 million annually.

Jim Vitak, Ashland spokesman, said he couldn't provide a breakdown of cuts at Ashland's main administrative offices including its corporate office in RiverCenter.

He said the local cuts are "frankly, a small number.'' The company - which owns Valvoline, Ashland Specialty Chemical and APAC highway construction - employs fewer than 100 at the corporate headquarters, which was moved from Ashland, Ky., in 1998.

The specialty chemical, highway construction and car-care products maker said most of the cuts, which are on top of 200 jobs eliminated earlier this year, will be completed by Nov. 30.

The earlier round of cuts, which generated $8 million in severance and related costs, were designed to save $25 million annually.

Both rounds of job cuts represent about 7 percent of Ashland's 10,000 salaried employees. Total employment is 24,000.

The company will include an $18 million before-tax charge for the just-completed fourth quarter for severance and other costs from the latest job cuts.

James J. O'Brien, Ashland chairman and CEO, said the cost cuts were key to the company's goal of "becoming a low-cost, operationally excellent organization.''

Since succeeding retired chairman Paul Chellgren last year, O'Brien has launched a wide-ranging program to tighten the company's focus, cut costs and debt and increase profitability.

In reporting fiscal fourth quarter and full-year results Oct. 21, Ashland will include a reserve for the estimated $9 million loss on APAC assets identified for disposition and an $80 million after-tax gain for the recently completed sale of its electronic chemicals business.

Ashland's shares closed Wednesday at $33.88, up $1.03.


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