Mueller to close U.S. Pipe manufacturing ops in N.J.

Mueller Water Products Inc. on November 6 announced that its U.S. Pipe and Foundry division intends to close its ductile iron pipe manufacturing operations in Burlington, N.J., by February 2008, eliminating approximately 180 jobs. The Burlington facility will continue to be used as a full-service distribution center for customers in the Northeast.

Discontinuing this manufacturing is part of U.S. Pipe's efforts to reconfigure its operations to remain competitive and increase margins. Production will be transferred from Burlington to other U.S. Pipe facilities.

"To be globally competitive in our ductile iron pipe business, we must constantly strive to be the low-cost producer," said Gregory E. Hyland, president, chairman and chief executive officer. "We are committed to taking the steps necessary to protect our leadership position in the market and to build the foundation necessary for future growth."

In connection with this action, the company expects to record a restructuring charge of approximately $19 million, substantially all of which will be taken in the first quarter of fiscal 2008. This charge is comprised of approximately $15 million of asset write-offs and $4 million of cash costs, including severance and other costs associated with the closing. Incremental cash operating expenses associated with the restructuring of approximately $3 million are expected to be incurred throughout the final three quarters of fiscal 2008. Savings on an annualized basis are projected to be in the $15 to $17 million range, with approximately $12 million expected to be realized in fiscal 2008, partially offset by incremental operating expense of $3 million.