Fedders Announces Layoffs, Sale of Maryland Operations
PEAPACK, N.J. (AP) _ Fedders Corp. announced Thursday it will close its New Jersey production plants, laying off 600 people, because of stubbornly low demand for the company’s air conditioners.
Fedders also announced it will sell its Maryland compressor plant for $76.6 million.
With the closing of plants in Woodbridge and Dover, Fedders will consolidate production at plants in Effingham, Ill. and Columbia, Tenn.
″It’s obviously a terrible personal tragedy for Fedders employees,″ said Woodbridge Mayor James McGreevey.
He said job creation efforts are being rebuffed by a steady flow of poor economic news from the private sector. ″You’re constantly swimming against the tide,″ McGreevey said.
Fedders Chief Executive Officer Sal Giordano Jr. said shipments industrywide of room air conditioners in the United States for the first six months of this year were the lowest since 1986.
″The restructuring is designed to significantly lower break-even volume, in the face of continuing low U.S. demand, by reducing excess capacity and fixed costs,″ Giordano said.
Fedders is selling its Rotorex compressor manufacturing operations located near Frederick, Md. for $63 million plus the assumption of about $13.6 million in liabilities. NYCOR Inc., a Basking Ridge, N.J. holding company seeking to acquire manufacturing operations, is buying the 460-employee operation.
NYCOR said it will sell Rotorex products to Fedders as well as other air conditioning and refrigeration manufacturers.
For the nine months ended May 31, Fedders reported a $6.6 million loss. For the same time period the year before, the company reported losing $25.4 million.
For the latest quarter ended May 31, Fedders reported a $2.9 million profit. For the same quarter last year, the company posted a $5.4 million profit.
Fedders said the closings and sale of the plant will necessitate a restructuring charge for the fourth quarter ended Aug. 31 of about $10 million, or 54 cents per share.