Revlon to shed 170 jobs in shift to U.S. Mississauga plant loses out in global consolidation

By John Spears, The Tononto Star, 25 October 2000

About 170 employees at a Revlon Canada Inc. manufacturing plant in Mississauga will lose their jobs when production shuts down in January.

Revlon will maintain about 200 jobs in Mississauaga as it keeps a distribution centre with a staff of 50, and continues to run its sales and marketing operations there.

About 150 of the workers losing their jobs are members of the Communications, Energy and Paperworkers Union of Canada.

Union official Bob Smart said talks are under way with Revlon to provide a severance package that goes beyond the minimum legal requirements. The average wage of plant workers is $16 to $17 an hour, Smart said.

Cynthia Passmore-McLaughlin, general manager of Revlon Canada, said the company is "working very closely" with the union to make sure employees are fairly compensated.

"We will provide support for them in finding alternative employment," she said. "We are doing all we can to connect them with potential employers in the area."

The plant's products include nail polish, lipstick, foundation, eye makeup, blush and Mitchum deodorant. Production is being transferred to the United States.

Passmore-McLaughlin said the Mississauaga plant lost out as the parent company, Revlon Inc., consolidated manaufacturing in fewer, more efficient facilities around the world.

The bigger plants can get longer production runs and use more efficient, high-speed equipment, she said. Those advantages more than offset higher shipping costs.

"Location of a factory is not as important as it used to be," she said. "For quite some time we've been sourcing globally, wherever the most efficient way to produce that product is."

About half the Revlon products sold in Canada were once manufactured at the Mississauaga plant, Passmore-McLaughlin said. But with the consolidation, Revlon Canada has been selling more products manufactured elsewhere.

Although the Mississauga plant shipped a few products to Asian markets, most of its products remained in Canada. It had operated for about 20 years.

The parent company is restructuring after recording poor results. Its share price on the New York Stock Exchanges has skidded, closing yesterday at $6.25 (U.S.), up 6.5 cents. It has sold product lines and closed other production facilities around the world.

Consumption of Revlon products hasn't slipped, but sales are down

The company says consumption of its products hasn't slipped, but sales are down because it has cut shipments to customers so they can reduce their inventories.

Revlon has predicted "strong performance in the year 2000" after its restructuring efforts. But the company reported a net loss for the first half of $40.9 million (U.S.), or 80 cents a share, double the loss of $20.4 million (U.S.), or 40 cents a share, in 1999.

While Revlon struggles, Estée Lauder Cos. Inc. reported stronger sales and earnings yesterday. The company, which also owns Toronto-based MAC Cosmetics, reported that sales climbed 8 per cent in the latest quarter.