Cardinal Health, Inc. : Cardinal Health Sees $79 Million in Costs from Production Move
01/30/2013| 06:23pm US/Eastern
By Jon Kamp
Drug wholesaler Cardinal Health Inc. (CAH) on Wednesday said shifting the production of procedure kits, along with other planned restructuring, will cost $79 million and result in the elimination of 180 positions.
Cardinal Health plans to move the production from Waukegan, Ill., to facilities in South Carolina and Mexico. The production involves assembling kits of medical products for surgery, a Cardinal Health spokeswoman said.
The move will eliminate 650 positions in Waukegan, the spokeswoman said, but the net loss to the company will be about 100 because Cardinal Health will be adding positions in South Carolina and Mexico. After the move, the company will then consolidate its office space in Waukegan.
In addition, Cardinal Health plans to reorganize its medical-segment organization, which will result in eliminating about 80 positions. Also, the company plans to sell its sterilization processes in El Paso, Texas.
Cardinal Health said it sees the restructuring actions completed by the end of fiscal 2014, and it expects to start realizing cost savings from the plan that same fiscal year, which ends June 2014.
For the fiscal year ended in June, Cardinal Health reported earnings of $1.07 billion on sales of $107.55 billion. The company had 23,300 employees in the U.S. as of June 30, according to its most recent annual report filed with the Securities and Exchange Commission.
Write to Jon Kamp at email@example.com
Corrections & Amplifications
This item was corrected at 7:30 p.m. ET to reflect that El Paso is eliminating 80 positions from as part of its medical-segment reorganization, not the sale in El Paso. The company has about 23,300 employees in the U.S. The original version misstated the source of eliminating 80 positions and the company's workforce
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