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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
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Form 8-K
CURRENT REPORT
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Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 24, 1997
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ARCO CHEMICAL COMPANY
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
1-9678 51-0104393
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(Commission File Number) (IRS Employer Identification No.)
3801 West Chester Pike, Newtown Square, Pennsylvania 19073-2387
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (610)359-2000
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Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
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On June 24, 1997, ARCO Chemical Company (the "Company") announced a
cost reduction program designed to achieve $150 million in annual savings. As
part of the program, the Company intends to reduce the number of employee and
contractor positions at the Company by 800 to 1,100, from a worldwide base of
5,300 positions. The changes are expected to be substantially in place by 1999.
See also the Company's Press Release, dated June 24, 1997, filed as Exhibit 99
to this Report.
Item 7. Financial Statements and Exhibits.
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(c) Exhibits:
99 Press Release, dated June 24, 1997.
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SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ARCO CHEMICAL COMPANY
/s/ Van Billet
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Van Billet
Vice President
and Controller
June 27, 1997
-3-
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EXHIBIT INDEX
Exhibit
Number Description
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99 Press Release, dated June 24, 1997
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ARCO Chemical Company [LOGO APPEARS HERE]
PUBLIC AFFAIRS NEWS
3801 West Chester Pike
Newtown Square, PA 19073-2387
FOR RELEASE: Immediately
ARCO CHEMICAL LAUNCHES PROGRAM TO REDUCE COSTS, STREAMLINE
OPERATIONS WORLDWIDE
Newtown Square, PA, June 24, 1997 -- ARCO Chemical announced today that
it is implementing a program that will result in $150 million in annual cost
savings. A key part of the savings will come from a reduction of 800 to 1,100
employee and contractor positions over the next few years, on a worldwide base
of 5,300 positions.
The changes are part of a broad initiative, discussed last month by CEO
Alan R. Hirsig at the company's Annual Meeting of Stockholders, to build
shareholder value, to increase efficiency, and achieve a double-digit percentage
reduction in the company's fixed and controlled costs, which are roughly $750
million a year. The cost reductions are to be substantially in place by 1999.
"Our drive is to be a highly competitive chemical company with leadership
profitability, excellent growth prospects, and greatly enhanced value for all
stakeholders, including shareholders, customers, and employees," Hirsig said.
"Other steps we've taken to enhance shareholder value include setting
significant stock ownership requirements for directors and executives; adopting
a new financial measure, Return on Capital Managed (RCM), as a way to focus all
parts of the organization on increasing the company's profitability; and raising
the percentage of employee compensation that is linked to the company's
financial success."
(more)
EXHIBIT 99
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ARCO Chemical Launches Program/add 1
ARCO Chemical remains committed to profitable growth in its core businesses
and continues its drive to introduce differential, value-added products that
meet market needs. "Our program of cost reduction can be done at the same time
we continue to grow the company and is consistent with our efforts to serve our
customers," Hirsig added.
A number of changes have already been implemented. These include the
recent realignment of the company's business structure to speed
commercialization of growth opportunities and better reflect the realities of
the marketplace; creation of a Supply Chain organization to minimize raw
material and logistics costs, reduce working capital, and better meet customer
needs; and merging the Manufacturing and Engineering functions to achieve
production economies. The restructuring effort will continue through the end of
1998. The company anticipates that a special charge to earnings will be taken
later in 1997 to account for the costs of the program. The amount of the charge
has not been determined.
"Once we are through this transition, we will emerge as a company that is
better prepared to grow, even more agile in its decision-making, and clearly
focused on building value for shareholders," commented Hirsig. "Our ultimate
goal is to be a highly competitive chemical company with excellent growth
potential."
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For further information, contact:
Sallie D. Anderson, Communications (610) 359-5773, or
Patricia D. Bartlett, Investor Relations (610) 359-3171.
For a menu of ARCO Chemical's news releases and to retrieve a specific release,
visit ARCO Chemical's website at http://www.arcochem.com on the Internet. To
receive a press release by fax, call 800-758-5804; use code #062063.
