Ball Corp. will cease production at its Birmingham, Ala.; Chatsworth, Calif., and Longview, Texas, beverage packaging plants in 2018. Existing customers will be supplied by other Ball facilities.
Ball also will begin construction on a new, state-of-the-art beverage packaging facility in Goodyear, Ariz., which is expected to begin production in the second quarter of 2018 and will serve growing customer demand for specialty cans in the southwestern U.S.
“These transformational actions will optimize our plant network, realign our standard 12-ounce beverage can and end capacity, increase our manufacturing flexibility and drive efficiencies so we can better compete with other packaging substrates,” said Carlos Medeiros, president, Beverage Packaging North & Central America.
Ball will record a total after-tax charge of approximately $22 million, primarily for employee severance, pensions and other benefits, facility shutdown costs, and asset impairment and disposal costs, for the closure of Birmingham, Chatsworth and Longview. Most of the charge is expected to be recorded this quarter. The company expects to achieve approximately $50 million of annualized net fixed cost savings in late 2018 and beyond, which contributes to the $300 million plus acquisition synergies expected to be delivered by the end of 2019.
The Birmingham plant, which opened in 1952, employs 91 people and produces beverage can ends, is expected to cease production by the end of the second quarter 2018. The Chatsworth plant, which opened in 1975, employs 118 people and produces beverage cans in multiple sizes, including standard 12-ounce cans, is expected to cease production by the end of the third quarter 2018. The Longview plant, which opened in 1972, employs 100 people and produces cans in two sizes, is expected to cease production by the end of the second quarter 2018. All closure dates are subject to customer needs.
Affected employees may be provided benefits and outplacement services and are eligible to apply for job openings within Ball.