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Diebold Inc. took a $12 million charge to second-quarter earnings to close its manufacturing plant in Newark, Ohio, the North Canton, Ohio-based company noted in a U.S. Securities and Exchange Commission filing Friday. Diebold, however, expects to post a $1 million to $2 million gain when the property is sold, the ATM manufacturer said. The Newark plant's closing is part of a worldwide realignment of manufacturing operations, including reducing its worldwide work force, Diebold said last week when announcing its second-quarter earnings. The repositioning will reduce to two from four the number of plants that make Opetva ATMs, executives say. Diebold last year launched a cost-cutting initiative to save $100 million in expenses. The company nearly has completed that phase, and it has launched a second $100 million cost-cutting program. The Newark factory makes security equipment for bank branches and retailers, and Diebold is shifting that production to an Opteva factory in Lexington, N.C. Diebold is moving the Lexington plant's Opteva manufacturing to factories in China and Hungary that also make Opteva ATMs. The Newark plant employs 100, mostly union workers. Layoffs are to begin in October and should be completed by the first quarter of 2009, Diebold says. Diebold's charge to earning consists of $11 million in cash and $1 million in noncash charges. The $11 million covers employee severance and pensions. The $1 million noncash charge is an accounting procedure that concerns the factory's value.
