Georgia-Pacific To Combine Wood Units

Atlanta, GA, Dec. 9--Georgia-Pacific will combine its industrial wood products group with its structural panels and lumber units early next year to create a new wood products unit, according to an internal memo sent to employees Monday, according to the Atlanta Journal-Constitution. Unifying the separate divisions will allow Atlanta-based Georgia-Pacific to operate one cohesive sales and manufacturing group, said Dave Paterson, a company executive vice president who also serves as president of G-P's building products division. "While these businesses will continue to make and sell their distinct product lines and focus on maintaining their leading positions in the building materials marketplace, there are distinct advantages to directly sharing the wood products manufacturing and sales expertise that each of these units possesses," Paterson said in the memo. Company spokesman Greg Guest confirmed the memo. It is unclear whether the consolidation will lead to job cuts. Georgia-Pacific currently is determining the specific organizational and administrative changes that will occur when the units are merged, according to the memo. Georgia-Pacific is in the process of reducing administrative overhead by $200 million between 2002 and 2004. The company also is focusing on consumer products such as Brawny paper towels and Quilted Northern bath tissue while trying to sell off some of its commodity-based business such as pulp and lumber. The company also is considering the possible sale of its building products distribution business. "We are proceeding as planned with our exploration of options for distribution, and the process is going smoothly and as timely as possible to achieve a positive outcome," Paterson said in the memo. "All of the actions we are taking within the building products group are aimed at forging our units into a stronger and more closely aligned set of businesses focused on meeting our customers' needs," Paterson said. The new wood products unit, to be led by Executive Vice President Ronnie Paul, will be effective Jan. 1, according to the memo. Paul will report to Paterson. Elliott Savage, president of the industrial wood products, will become senior vice president of wood product sales and will report to Paul. Other divisions within Georgia-Pacific's building products group, including the gypsum and chemical units, will continue as separate business units, according to the memo.

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