- The Washington Times - Monday, April 20, 2009

LOUISVILLE, KY. (AP) - Executives at liquor company Brown-Forman Corp. said Monday they will trim their work force about 6 percent among other cuts expected to save up to $25 million a year as they prepare for “uncertain and challenging” times.

Other belt-tightening efforts at the company behind Jack Daniel’s Tennessee Whiskey include early retirement offers to some salaried U.S. workers. In addition to cutting 250 jobs, the company plans to eliminate merit increases for all employees, cut discretionary spending, including travel and meetings, and reduce bonus targets for executives in the upcoming fiscal year, said Brown-Forman spokesman Phil Lynch.

Brown-Forman predicted a fourth-quarter charge of about 5 cents to 7 cents per share for costs associated with the job cuts and early retirements. The one-time charge was anticipated in the company’s previously reported earnings-per-share guidance for the current fiscal year, which remains in the range of $2.70 to $2.90 a share, the company said.

In all, the cost-cutting is expected to save Brown-Forman between $15 million and $25 million next fiscal year, which begins May 1.

The company plans to announce its earnings-per-share projection for the upcoming fiscal year when releasing its fourth-quarter earnings in early June, Lynch said.

Job cuts will affect executives, support staff and hourly workers, Lynch said. About 90 percent of cuts are in the United States and Mexico, with a few positions affected in Europe and the Asia-Pacific region, he said.

About 4,100 people work for Louisville-based Brown-Forman around the world.

The company’s brands include Southern Comfort, Finlandia vodka, Canadian Mist whiskey, el Jimador and Herradura tequilas, Fetzer and Sonoma-Cutrer wines, Korbel champagne and Woodford Reserve bourbon.

Chief Executive Paul Varga said making the cuts was “very difficult” but “necessary to best position Brown-Forman for both the difficult times we are confronting today and the uncertain and challenging environment that we expect ahead of us.”

Employees losing their jobs will be offered severance pay, career counseling and other benefits.

The company has offered early retirement to 147 salaried U.S. workers, Lynch said. So far, 60 have accepted _ including 51 in Louisville.

Asked if additional jobs cuts might become necessary, Lynch said: “You never say never, because one doesn’t know what the economy is going to do, but we believe that we’ve taken the actions now to have the company be in the right size and the right position to continue to grow in fiscal 2010.”

Brown-Forman’s Class B shares were up $1.38, or 3.3 percent, at $42.73 in late afternoon trading Monday.

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