Shares of foodmaker American Italian Pasta
What's really going on at American Italian: Management now has the board's OK to execute a "restructuring and rightsizing program" that includes shuttering the company's Kenosha, Wis., plant, and stopping production at two other plants for a total of about five weeks. The Kenosha move and "selected job eliminations" are expected to cut the company's workforce by 14%, which should have a pretty significant impact on expenses. (The company's press release has its headcount at about 720 worldwide.)
American Italian expects the moves to cost it about $11 million before tax; they're seen delivering a similar amount of annual pretax savings in the years to come.
Simply put, now is a bad time for pasta makers. Former Hershey
All this has investors watching American Italian very closely, as the shares' disappointing downward 12-month run indicates. The company is well positioned for success in a strong market -- its customers include Kroger
More Foolish pasta coverage:
Fool contributor Dave Marino-Nachison doesn't own any of the companies in this story.
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