PPG Industries Inc., the Pittsburgh-based glass and paint manufacturer, said Thursday it is cutting 1,500 workers worldwide and taking a pre-tax charge of $101 million to pay for the move as the company responds to a slowing economy. ‘We won’t know for some time if we’re experiencing an official recession … although we’re certainly proceeding as if that is the case,’ Chairman and Chief Executive Officer Raymond W. LeBoeuf said at the company’s annual shareholders meeting yesterday. First-quarter results, also reported yesterday, showed slowing sales and declining profit. Fewer than 50 local employees are to be included in the job cuts. Most will be at the company’s downtown Pittsburgh headquarters, said spokesman John Ruch. The cuts are not likely to include any of PPG’s research staff. LeBoeuf said the painful actions have to be taken now because the economy’s future course is not clear. He spoke to reporters following the company’s uneventful shareholder’s meeting at the Marriott City Center Hotel in Pittsburgh. ‘History would suggest we have not yet seen the bottom’ of the current cycle, said LeBoeuf, a history student. He said the current slowdown became apparent last summer as slowing car sales rippled through the economy. But he is hopeful for an upturn later this year. Automakers, a major PPG customers, ‘did a much better job this time in controlling their inventory,’ but ‘they are still giving financial incentives,’ which suggests demand is still soft, he said. LeBoeuf told shareholders in a speech at the annual meeting that the company will perform better than many of its competitors in a slow economy. ‘After each economic downturn, we have come out stronger,’ LeBoeuf said. PPG is the No. 2 maker of automotive paint, a large manufacturer of automotive and aircraft glass, and employs 35,000 worldwide. Its brands include Pittsburgh Paints, Olympic and Lucite house paints. PPG’s first-quarter earnings, released yesterday, reflected softening demand. Net income was $56 million, or 33 cents a diluted share, versus net income of $139 million, or 79 cents a share, in the year-ago quarter, which included an after-tax charge of $35 million to write off an equity investment. The company in December said it would take a restructuring charge of from $50 million to $100 million to cover expenses to close plants and reduce its work force. PPG’s charge disclosed yesterday came in slightly above the high end of that range, at $101 million. ‘You never know how these things are going to turn out, but once they start, there’s a feeling that you have to get it over with, instead of having to take another charge later on,’ said William Young, an analyst with Credit Suisse First Boston in New York. About half of the 1,500 terminations are in Europe. The firings represent about 4 percent of the company’s worldwide work force. But the terminations in the Pittsburgh region are slightly more than 1 percent of its total local employment of about 3,100. Small plants in O’Fallon, Mo., and Louisville, Ky., each with 10 to 15 job losses, are being closed, along with one in Germany with 60 workers . LeBoeuf said the plant closures and ‘rationalization’ of operations acquired in recent years – consolidating some operations and moving others – were going to happen eventually. But with the slowing economy, he said it made more sense to accelerate the cost-reduction program. During the past three years, PPG has acquired businesses throughout the world, mostly in its coatings segment. Analyst Young said he was surprised the company was able to make stick an energy surcharge it imposed on glass customers. PPG’s results were better than expected, he said. The company also kept its 31-year-old record of increasing the dividend intact this year. In January, it raised the quarterly dividend payable in March from 40 cents to 42 cents. Yesterday, the board declared a 42-cent quarterly dividend payable June 12 to shareholders of record May 10. ‘If there ever was a year (not to raise the dividend) this would be it, but we didn’t,’ Leboeuf said. In trading yesterday, PPG closed at $52.64, up 60 cents.

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