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Louisiana-Pacific Corp., a leading supplier of engineered wood products and other building materials, has announced a plan to reduce its capital spending to $25 million a year for the next several years.
“LP is now in the midst of a right-sizing effort to reflect current business conditions,” said company CEO Rick Frost. For comparison’s sake, he noted that the capital spending for 2008 is expected to reach $170 million.
Among the planned actions are a 14 percent cut in the salaried workforce, approximately 200 positions. Flight operations have been shut down, research and development has been “put into hibernation,” and IT operations are now in “maintenance mode,” Frost said. Marketing and sales expenditures have been reduced, and salaries have been frozen.
Taken together, these initiatives should save Louisiana-Pacific between $30 and $35 million a year, Frost said.
Over the past several quarters, the Nashville, Tenn.-based company has also curtailed operations at four oriented strand board (OSB) mills and taken downtime at other production facilities.
On Nov. 4, Louisiana-Pacific reported a third-quarter loss of $100 million. Sales declined to $389.6 million from $472.5 million during the same period last year.