Vulcan to Make 200 Layoffs

Monday, announced it will lay off 200 employees and consolidate its eight divisions into four operating regions. The world's largest producer of construction aggregates has operated for the past 60 years.

According to a press release from the Birmingham, AL-based company, the initiative is expected to generate an ongoing annualized pre-tax cost savings of approximately $30 million. Layoffs will mostly come from overhead and administrative staff with staffing at plant facilities largely unaffected, the release said.

Vulcan's cost-saving initiative comes as it faces The smaller competitor has higher profit margins than Vulcan and says it could cut $250 million a year in costs if it ran its rival, The New York Times reported.

The Wall Street Journal said the merger proposal comes in anticipation of a rebound in the construction industry.

"We are bringing our proposal directly to Vulcan's shareholders after Vulcan ceased participating in private discussions toward a negotiated transaction, which commenced over a year and a half ago," Martin Marietta CEO Ward Nye said in a company news release.

Nye said the deal would reward Vulcan shareholders with an annual dividend at 20 times the rate of what they get now.

Vulcan's Board of Directors is continuing to review the offer and plans to advise  shareholders of its recommendation by Friday.

Meanwhile, Vulcan will be consolidated into 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 Mills, Senior Vice President, East. The company said it expects to complete the consolidation by the first quarter of 2012. 

"This consolidation is another important step in our ongoing efforts to optimize operational efficiency and better position the Company for improved performance," said Chariman and CEO Donald James. "We are very mindful of the impact this initiative will have on affected employees and will work with them to make this transition as smooth as possible."