DETROIT (AP) — Champion Enterprises Inc. announced Friday it is cutting 1,000 jobs and is closing four homebuilding plants and 35 retail sales centers because of a continuing slump in the demand for manufactured homes.
The job cuts amount to 13 percent of Auburn Hills-based Champion's work force, company spokeswoman Colleen Bauman said. Employees found out about the layoffs on Friday morning.
Champion is one of the nation's largest producers of manufactured housing.
"We are committed to a return to sustained profitability and believe today's actions, together with our previously announced plans to exit consumer financing, are necessary steps in this strategy," Al Koch, Champion's chairman, president and chief executive, said in a statement.
The four homebuilding facilities being closed are in Georgia, Kentucky, North Carolina and Texas, the company said. Production at a fifth facility in Alabama is being moved to an idle plant, and an undetermined number of those workers also will lose their jobs, Bauman said.
Following the closings expected to occur Friday, Champion will operate 30 homebuilding facilities and 80 retail sales centers.
Analyst John Diffendal of BB&T Capital Markets said he was not surprised to hear about Friday's cuts because the manufactured home industry is at a 40-year low.
"Closing four plants is about what I think makes sense," Diffendal said. "It still leaves them with 30 plants, which is nine more than any other manufactured housing company."
The company said it expects to take a charge of $35 million before taxes primarily in its fiscal third quarter, which ends Sept. 27. The restructuring charge includes $6 million for the previously announced closing of HomePride Finance Corp., which offered home loans.
In addition to the restructuring expenses, Champion expects to record a pretax goodwill charge of $39 million for the reduced value of its assets.