Steel Products
A.M. Castle Announces Restructuring Plans
Written by John Packard
January 18, 2013
Written by: Sophia Fain
A. M. Castle & Co. announced restructuring plans to improve annual operating profit by $33 million once fully implemented in 2013. Changes to its metals business include an organizational restructuring, warehouse realignments and performance improvement programs.
“This broad, performance-enhancing plan will enable us to better serve our customers by organizing our operations around them and their needs,” said Scott Dolan, president and CEO. “Our goals are to simplify how we do business, optimize inventory levels, reduce waste, and improve on-time performance, which we expect will help us increase revenue while reducing costs.”
The organizational restructuring means moving from the current decentralized commercial unit structure to a centralized approach with support functions and three vertical sales teams. Those sales teams will each be led by a vice president and will provide specialized expertise to customers in Castle Metals’ Aerospace, Oil & Gas, and Industrial markets. Castle Metals is also adding a new sales incentive program, under a new position of Chief Commercial Officer.
The company reports, “As part of its branch fulfillment network realignment, the Company plans to consolidate five warehouse facilities into the existing network. The Company currently operates 30 metals segment branches in North America, Europe and Asia, which include warehousing, sales, product processing and other operations. Castle will maintain local sales offices to continue serving customers in the markets in which it plans to close warehouses.”
Performance improvement efforts will include implementing a continuous performance improvement program focused on direct and indirect sourcing, transportation, strategic pricing initiatives, back office functions, and optimizing inventory investment.
However, the restructuring will reduce the Company’s workforce by about 10 percent.
The company also wants to reduce Days Sales Inventory to less than 150 by the end of 2013 and 120 by the end of 2014.
Dolan added, “In terms of sales activity and recent market trends, we experienced softness in demand that was greater than anticipated during the fourth quarter, as well as lower activity levels due to extended seasonal shutdowns. In addition, the monthly Purchasing Managers Index trends for the fourth quarter were consistent with third quarter levels, including a November 2012 reading that was below the 50.0 expansion level.”
Dolan concluded, “We are forecasting that the overall business conditions we experienced in the fourth quarter will continue, and we believe strongly that the actions we are taking will position the Company to operate successfully through all market cycles.” (Source: A. M. Castle & Co.)

John Packard
Read more from John PackardLatest in Steel Products

Rig Count Drops in the US, Inches Up in Canada
The number of active oil and gas drilling rigs in the US dropped this week while Canada’s count increased by one, said oilfield services company Baker Hughes in its weekly report.

UAW President To Announce New Strike Plans on Friday Morning
The United Auto Workers (UAW) president Shawn Fain is scheduled to make an announcement on Facebook Live, according to the UAW International Union's Facebook page.
Sheet Lead Times Mixed, Plate Plummets
While lead times for sheet again had mixed movements this week, those for plate collapsed, according to SMU’s most recent market survey.

Biden to Meet EU Officials in Washington to Discuss Steel
US President Joe Biden is set to meet European Commission President Ursula von der Leyen and European Council President Charles Michel on Oct. 20 in Washington ahead of a deadline for an agreement on steel, according to a report in Reuters.

Ford Pauses Work on $3.5B Battery Plant: Report
Ford Motor Co. said on Monday that it has stopped work at its $3.5-billion project for an electric vehicle (EV) battery plant in Michigan, according to media reports.