CF Industries Holdings Inc. (CF) is moving ahead with plans toward achieving the $135 million in synergies that it promised shareholders from its recent acquisition of Terra Industries Inc.
CF told employees July 15 that it is implementing decisions about the organizational design for some functions of the combined company. As a result, CF said it is extending employment offers to some employees currently working out of Terra’s former headquarters at Sioux City, Iowa, and is notifying others in Sioux City and at CF’s Deerfield, Ill., headquarters that their positions will be eliminated.
CF did not reveal how many employees would be impacted by these moves. In the meantime, Sioux City locals are concerned about the number to be unemployed, as well as the fate of the headquarters building itself.
CF said it appreciated the fact that all employees of both companies helped to create successful businesses, and is grateful for the contribution of each individual to that success. CF will provide support to employees who leave the company as a result of the integration, including continuing pay for a period of time based on years of company service, extended access to medical benefits, career transition services, and use of the Employee Assistance Program.
CF operations at the Port Neal, Iowa, nitrogen manufacturing facility will not be affected by the July 15 announcement.
In May, CF Chairman, President, and CEO Stephen Wilson detailed synergy savings, including $55-$65 million in Selling, General, and Administrative Expenses (SG&A), headquarters consolidation, and estimated combined SG&A; $25-$30 million in logistics and railcars; $10-$15 million in purchases and procurement; $10-$15 million in Donaldsonville optimization, turnarounds, and capital expenditures, as well as reduction in inventory, resulting in lower carrying costs; and $5-$10 million in distribution facility optimization (GM May 31, p. 1).