USG Corporation has announced that it will eliminate 20% of its workforce within the next two months; Chicago jobs – where the company is headquartered – will not be immune. USG, also known as United States Gypsum Corporation, is a Fortune 500 company that manufactures construction materials. Incorporated in 1901, its corporate offices are in the Chicago Loop.
USG reported third quarter 2008 net sales of $1.2 billion and a net loss of $40 million. For the same period a year ago, the corporation reported net sales of $1.3 billion and net earnings of $7 million.
While approximately 800 people work in the Chicago, Libertyville, and Schiller Park, Illinois locations, the company has plants, mines, quarries, transport ships and other facilities across North America, Europe and Asia-Pacific. Nearly 900 jobs worldwide are expected to be cut.
“Our core wallboard business continued to be affected by the sharp drop in the residential housing market and high raw material and energy costs compared to last year,” said William C. Foote, USG Chairman and CEO. “The distribution business is being impacted by lower product shipments and tighter margins. The ceilings business continued year-over-year sales growth again this quarter; however, the commercial market has begun to exhibit signs of weakness.
“Our focus on costs and efficiencies, including capacity closures and overhead reductions, has helped to mitigate the effects of the downturn in all our markets,” added Foote. “As conditions continue to deteriorate in the broader economy, we are preparing plans to significantly reduce costs further, improve operational efficiency and maintain our liquidity. We recognize the importance of liquidity and since the beginning of the third quarter, we have finalized asset-based financings that provide us with up to approximately $235 million of additional borrowing capacity.”
Foote concluded, “When the market eventually rebounds, we believe USG will be well-positioned to benefit from the operating leverage in its businesses.”