Atlanta-based Newell Rubbermaid Inc. on Thursday said it would consolidate decision-making for some key European business functions in Switzerland, a move projected to boost profits by $50-60 million annually when completed in 2012.
The consumer products giant will spend up to $100 million on the restructuring, which the company is calling its European Transformation Plan. The goal is to increase efficiency by putting executives who handle marketing, supply chain management, finance and other operations in the same place.
“By consolidating some of these key functions in a single location, we can have faster decision-making, a streamlined structure, and that will enable us ultimately to go to markets faster and to be more nimble as a company,” Newell Rubbermaid spokesman David Doolittle told GlobalAtlanta.
European manufacturing operations will be unchanged by the plan, and it’s currently unclear whether any layoffs will occur, Mr. Doolittle said.
“There may be some cuts, but it’s too early to say at this time,” he said. Most affected employees will be allowed to transfer to the new location. The company has yet to pick a city in Switzerland for its new base.
The move comes as Newell Rubbermaid seeks to lessen its dependence on the North American market, which accounts for about 70 percent of its revenues. One of the company’s main goals is to achieve a better balance between U.S. and international sales.
“The European Transformation Plan represents a critical step in the execution of our global strategy of investing in innovation, brand building and cost optimization to drive shareholder value,” Mark Ketchum, Newell Rubbermaid’s president and CEO, said in a news release.
Historically, growth in Europe came largely from acquiring brands there and allowing them to operate independently. Eventually that resulted in an inefficient structure that is being reformed through the consolidation, Mr. Doolittle said. Europe makes up about 15 percent of the company’s approximately $5.6 billion in yearly global sales.
“Europe has a lot of potential, and we want to strengthen it as a growth platform for our brands,” Mr. Doolittle said.
As for other regions, Asia and Latin America each account for about 7 percent of revenues. In those areas Newell Rubbermaid is focusing on “high-growth countries” with large consumer markets, notably Brazil and China, he added.
Newell Rubbermaid’s brands include Sharpie markers, Rubbermaid home storage and organization products, Graco baby products, Calphalon cookware and many others.
For more information, visit www.newellrubbermaid.com.