Question-and-Answer Session
Operator
(Operator Instructions)
And your first question will come from the line of Nishu Sood with Deutsche Bank.
Nishu Sood - Deutsche Bank
Thanks, good morning, guys.
Mark Rothleitner
Good morning.
Mike Mangan
Good morning.
Nishu Sood - Deutsche Bank
I wanted to ask you about your margin trajectory. Obviously with the forecast you headed back to, or maybe even below the lows you saw in 2001. Now, obviously, the environment is pretty different, much more severe, sales declines, much more substantial commodity cost inflation.
Last time around, you obviously had a fairly dramatic response with the restructuring and recasting your manufacturing footprint. My question was, is there potential for an encore? I am not saying exactly the same thing. Obviously you can't recast your manufacturing footprint twice, but are you considering dramatic actions of any sort or to respond to what has happened? Or is it the case that you're pleased with your positioning and it’s simply a matter of weathering the storm?
Mike Mangan
I guess somewhere in between the issue, I guess it will be the best way to put it. Certainly, we do not have on tap or considering a major restructuring plan to address our cost structure because can only think our cost structure is second to none in our industry; however, we'll continue to take action.
You saw a relatively modest restructuring plan announced in the fourth quarter with a $20 million charge. We took some actions to consolidate some operations and take out headcount.
Followed that on with some more significant actions in the first quarter, closed two plants, our UK facility as well as the Decatur facility that was manufacturing pressure washers; announced a significant headcount reduction as well as a restructuring of the management structure of Power Tools business.
Those actions will throw-off a $20 million of savings this year and incremental $20 million again next year. That really is just now going to begin to find its way to the P&L back, the savings are very much backend loaded here for 2008.
As we look forward, we will continue to take actions if appropriate, given another selling environment and in the cost environment. Maybe one of the notes for here is since year-end; we have reduced headcount in the corporation by 10%. We came into this year with 25,000 employees. We're now at 22,500. So, we've taken by many measures, significant actions. We'll continue to take actions if necessary, but we don't have on the drawing board, if you will, a one big restructuring plan as you would have saw back in the 2001 timeframe.
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