Mobil Corporation Announces Restructuring Initiatives in European Refining Operations

Strategic Insights -

Mobil Corporation has announced significant initiatives to improve the profitability of its European refining operations, focusing on three refineries in Germany, France, and England. The company proposes to close its Woerth refinery in Germany and reduce operating costs at the Gravenchon and Coryton refineries. This restructuring is expected to result in the loss of approximately 500 jobs and will involve discussions with the workforce over the coming weeks. The company aims to reduce costs and increase profitability in the face of inadequate refining margins worldwide, particularly in Europe where there is excess refining capacity.

Key Takeaways:

  • Mobil Corporation plans to close its Woerth refinery in Germany, affecting 320 employees and 100,000 barrels of daily production capacity.
  • The company will reduce operating costs at the Gravenchon and Coryton refineries, which employ 650 and 350 people, respectively.
  • The total number of jobs affected by the restructuring initiatives is approximately 500.
  • Discussions with the workforce are expected to continue over the coming weeks.
  • The financial benefit from the restructuring is expected to be approximately $80 million a year before tax, compared to 1994.
  • The after-tax restructuring charge associated with the initiatives will be about $180 million, including plant write-down, and will be taken in 1995.
  • The Woerth refinery has a capacity of 100,000 barrels daily and has been operating since 1970.
  • The Coryton refinery, located on the Thames estuary east of London, employs 650 people and began operating in 1953.
  • The Gravenchon refinery, located near Le Havre in northern France, employs 350 people and began operating in 1935.
  • The refining initiatives are in addition to the worldwide restructuring of Mobil's staff support operations, announced on May 1.

Statistics:

  • 500 jobs are expected to be affected by the restructuring initiatives.
  • $80 million is the estimated annual financial benefit from the restructuring, before tax.
  • $180 million is the estimated after-tax restructuring charge associated with the initiatives.
  • 100,000 barrels daily is the capacity of the Woerth refinery.
  • 200,000 barrels-per-day is the capacity of the Coryton refinery.
  • 70,000 barrels-per-day is the capacity of the Gravenchon refinery.
  • 320 is the number of employees at the Woerth refinery.
  • 650 is the number of employees at the Coryton refinery.
  • 350 is the number of employees at the Gravenchon refinery.

Sources:

  • PRNewswire (May 31, 1995)
  • Mobil Corporation (NYSE: MOB)
  • John Lord or Gail Campbell Woolley of Mobil, 703-846-2500