Vulcan Materials streamline organizational structure
US$30 million annual savings expected as eight divisions are consolidated into four operating regions
VULCAN Materials Company have announced that they are consolidating their eight divisions into four operating regions as part of ongoing efforts to reduce overhead costs and increase operating efficiency.
The initiative is expected to generate ongoing annualized pre-tax cost savings of approximately US$30 million, in addition to approximately US$25 million in annual pre-tax overhead reductions already implemented in 2011.
Vulcan say the new organizational structure is consistent with their long-standing commitment to decentralized management of their sales, marketing and operating functions, and will allow the company to maintain close, local relationships with its customers.
Approximately 200 positions are expected to be affected by the changes, with most coming from overhead and administrative staff. Staffing at plant facilities will be largely unaffected.
Donald M. James (pictured), chairman and chief executive officer, described the consolidation as ‘another important step in Vulcan’s ongoing efforts to optimize operational efficiency and better position the company for improved performance’.
Following the consolidation, Vulcan will have four regions: East, South, Central and West.
The East Region, which will comprise the company’s former Southeast and Mideast Divisions, will be headquartered in Atlanta and led by Michael R. Mills, senior vice-president, East. Mr Mills was previously president of Vulcan’s Southeast Division.
The South Region will comprise the company’s former Florida Rock and Southwest Divisions, and will include Vulcan’s quarry and harbour on Mexico’s Yucatan Peninsula and related shipping assets. The South Region will be headquartered in Jacksonville, Florida, and led by James T. Hill, senior vice-president, South. Mr Hill was previously president of the company’s Florida Rock Division.
The Central Region will comprise the company’s former Midwest, Midsouth and Southern and Gulf Coast Divisions, excluding Vulcan’s Mexico facilities and related assets. The Central Region will be headquartered in Birmingham, Alabama, and led by Stanley G. Bass, senior vice-president, Central. Mr Bass was previously president of the Midsouth and Southwest Divisions.
The West Region, which will comprise the company’s former Western Division facilities, will be headquartered in Los Angeles and led by Alan D. Wessel, senior vice-president, West. Mr Wessel was previously president of the Western Division.
All four senior vice-presidents heading the newly formed regions will report to Danny R. Shepherd, executive vice-president, Construction Materials.
Vulcan say they expect to substantially complete the consolidation in the first quarter of 2012.
The consolidation plan itself was approved by the board of directors on 9 December 2011, prior to the receipt, on 12 December, of an unsolicited exchange offer from Martin Marietta Materials Inc.
Vulcan’s board is continuing to review this offer and intends to advise shareholders of its recommendation by Friday 23 December 2011.
