Rubbermaid to cut jobs, hike prices as cost of plastic rises

The increasing cost of plastic ingredients is forcing Newell Rubbermaid Inc. to lay off workers, scrap some of its basic home and office products and raise prices on other items by as much as 22%.

The announcement Tuesday, along with a lower projection for full-year earnings, sent shares of the storage gear maker to an all-time low of $14.89 before they rebounded to close at $15.61, up 17 cents.

Chief Executive Mark Ketchum said the Atlanta company hadn’t yet determined how many of its 22,500 employees would lose their jobs.

Newell Rubbermaid said it would divest, downsize or leave categories accounting for as much as $500 million in sales. Those include some products in the company’s Rubbermaid line of storage bins.

Prices for higher-margin items, such as janitorial products and stackable food containers, probably will rise.

Particularly vexing to the company are increasing oil and natural gas prices -- important components of resin, a key ingredient in many of the company’s plastic products.

Newell Rubbermaid has boosted prices twice already this year, bringing in an additional $100 million in revenue. It plans a third round of increases in October and will begin adjusting prices for resin products each quarter in January.

The company said it expected full-year earnings to be $1.40 to $1.60 a share. That’s down from the already lowered projection of $1.80 to $1.90 issued in April.