The fiber-optics maker is closing a plant in State College, Pa., as it continues its efforts to return to profitability.

InformationWeek Staff, Contributor

March 4, 2003

2 Min Read

CORNING, N.Y. (AP) -- Fiber-optics maker Corning Inc. is shutting down a plant in State College, Pa., and eliminating 1,000 jobs, or 4.3 percent of its work force, as a joint venture ends production of glass used in television sets.

The plant, operated jointly by Corning Asahi Video Products and the U.S. subsidiary of Japan's Asahi Glass Co., makes cathode ray tube glass used in conventional televisions in North America.

The executive committee of Corning Asahi Video and Corning's board have approved the plant shutdown, expected by the end of the second quarter, but Asahi has yet to approve the closure.

"This business has been facing a declining customer base and significantly increased imports for several years and it is now losing money," chief executive James Houghton said. "In our relentless drive to restore profitability to Corning, we cannot carry money losing mature businesses."

The company said it will record first-half pretax charges of $140 million to $170 million. Earnings in the first quarter will drop by $20 million.

Corning still expects a first-quarter net loss of $10 million to $50 million, or a loss of 1 cent to 4 cents a share. That excludes $320 million in costs for asbestos litigation and to exit the optical switching business and a $5 million gain from debt repurchases.

Corning had 23,500 workers at the end of 2002, spokesman Daniel Collins said. It employed as many as 42,000 people before the market for fiber optics dried up over the past few years. All but 20 of the job cuts will be due to the closure of the State College plant, he said.

In January, the world's biggest maker of optical fiber posted a fourth-quarter loss of $709 million to end what company officials called "a difficult and disappointing year." It was the company's seventh consecutive losing quarter.

Corning said it continues on track to return to profitability before restructuring and other one-time gains and losses by the third quarter of this year.

The plant shutdown will improve the company's cash flow and "assist us in achieving our profitability goal for the full year," said chief financial officer James Flaws.

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