CNA cutting 5%; Newell to eliminate 170 Illinois jobs

Chicago-based CNA Financial Corp. said it will cut 5 percent ofits work force after a second-quarter loss in insurance underwriting,and Newell Rubbermaid said it will lay off 170 workers in northwestIllinois.

CNA didn't say how many jobs would be cut. Based on its 15,500employees at the end of 2002, it may eliminate about 775 positions.

The company's net income more than doubled to $70 million, or 25cents a share, from $31 million, or 14 cents, in the same threemonths last year because of $249 million in investments gains.

Excluding the gains, CNA lost $179 million, or 86 cents a share,as it added $308 million to reserves to pay claims for workerscompensation and directors and officers' liability. Analysts polledby Thomson Financial expected earnings after investment gains andlosses of 35 cents a share.

Chief Executive Officer Stephen Lilienthal is cutting jobs andboosting reserves after selling policies too cheaply in the 1990s.The company also lost an arbitration ruling over a 1995 fire claimthat trimmed profit.

Also, Newell Rubbermaid will lay off 170 employees who makedrapery hardware for the company's Levolor-Kirsch Window Fashionsdivision.

The company said Wednesday it also will move some production linesto Mexico within 12 to 18 months.

The news comes six months after Newell announced it was cutting100 jobs at its Amerock division in nearby Rockford.

Stephenson County community and business leaders said they arewilling to offer tax breaks to manufacturers in exchange for keepingjobs. Stephenson County is iwest of Rockford in northwest Illinois.

"There are people who have been with Newell for many years, andtheir only sin is company loyalty," Freeport Mayor Jim Gitz said."It's not because people stopped buying the product, it's because ofinternational competition."

Newell said the company will continue to manufacture highlyautomated product lines, sold under the Newell Window Furnishingsname, in Freeport.

Laid-off workers will be given severance pay and outplacementassistance.

AP, Bloomberg News