GREENWICH, Conn. — United Rentals' move to close or consolidate a number of struggling branches in the next several months could affect as many as 5 percent of its 755 locations and lead to an undetermined number of layoffs. CEO Brad Jacobs told RER the company will make every effort to find other positions for employees of consolidated branches, and to lay off as few as possible.
The consolidation is in response to softening economic conditions, which forced the company to focus on measures to cut costs and reduce cash outlays, the company said. United said it would first try to improve revenue at underperforming branches before taking action, and would further cut costs by buying more used equipment and reducing 2001 expenditures on new equipment by about 60 percent to $400 million.
In other United news, the company last month priced $450 million of 10 3/4 percent senior notes due 2008. It also expects to receive a $1.5 billion senior secured bank facility concurrently with the sale of the notes.
The proceeds will be used to repay and replace the company's existing $1.6 billion bank facility and for other general office purposes. Jacobs said the refinancing was a “tremendous coup in the current market, given that 90 percent of the public companies are shut out of the capital markets.” Standard & Poor's and Moody's reaffirmed United's credit ratings.
United is No. 1 on the new RER 100 with $2.06 billion in 2000 rental volume.