UPDATE 3-Brunswick slashes outlook, work force

* Boat maker withdraws full-year guidance

* Closes three plants, fires another 1,450 workers

* Idles three other plants, mothballs fourth

* Says debt covenants may come 'under stress' (Adds details on plunging industry sales, debt covenant concerns, additional background, analyst comment and byline)

By James B. Kelleher

CHICAGO, Oct 9 (Reuters) - Brunswick Corp (BC.N) withdrew its full-year profit outlook on Thursday and said it would speed up closing plants already set to be shut, looking to slash costs as the turmoil in global markets torpedoes the recreational boating industry's already sinking sales.

The company, the world's largest maker of pleasure boats and marine engines, also said it would temporarily suspend production at three other boat plants to deal with the "extraordinary developments within the global financial markets that are affecting the recreational marine market."

Brunswick, whose shares fell as much as 25 percent during the trading session, also said agreements with some lenders were likely to come "under stress "in the coming months.

In a call to discuss the latest round of plant closures, layoffs and restructuring charges, Dusty McCoy, Brunswick's chair and chief executive, said industry sales of aluminum and fiberglass boats had tumbled more than 40 percent in July and August and warned that early signs suggested September was even worse.

"They've gone from having to manage their business to a down 15 percent scenario, to managing their business to a down 25 percent scenario, to now managing their business to a down 40 to 50 percent scenario on a global basis," said Hayley Wolff, an analyst at Rochdale Securities.

"It's very hard for them to get a grip here. So now it's an issue of balance sheet management. They've got to manage their cash as tight as they can."

Brunswick, which makes Hatteras and Sea Ray yachts as well as three dozen of other boat brands, said the plant closures announced Thursday, will result in the firing of 1,450 hourly and salaried workers.

The company said the cuts would reduce fixed costs by $300 million but require it to book pretax restructuring charges of between $200 million and $220 million pretax -- $180 million of that in 2008.

The company also warned it would take $496 million in pretax charges in the third quarter to reflect impairment of goodwill and certain trade names.

"We are living and working in the most turbulent economic times in recent history," McCoy said in a statement.

"The poor economy and the accompanying weak consumer sentiment have pressured marine markets, eroding the demand for boats and engines these past few months at a swifter pace than originally anticipated."

McCoy said that, given the grim sales outlook, and the effect that would have on the company's fixed-cost absorption, he was "no longer confident of achieving our goal of posting positive earnings for the full year, excluding restructuring and impairment charges."

The company's shares closed down $1.88 at $8.12 on the New York Stock Exchange.

The Lake Forest, Illinois-based company, which also makes fitness, billiards and bowling equipment, has been struggling for several quarters to deal with the housing-led U.S. economic slowdown, which has kept buyers out of marine showrooms.

Until now, Brunswick has continued to enjoy strong sales outside the United States, thanks in part to the dollar's weakness.

But with the world now plunged in the worst financial crisis since the Great Depression, areas outside the United States can no longer be counted on to offset softness here.

"Europe, which was the salvation for them, has completely rolled over -- faster than anyone imagined" said Wolff.

The company has already closed several factories, including plants in Aberdeen, Mississippi, and Antigo, Wisconsin, and lowered production rates at others.

The plants affected by Thursday's announcement are in Pipestone, Minnesota, Roseburg, Oregon, and Arlington, Washington, which will all be closed permanently months ahead of schedule; and one in Navassa, North Carolina, which will be mothballed indefinitely.

With the cuts announced Thursday, Brunswick has now fired or furloughed 5,300 workers since the start of the year -- 34 percent of its work force.

In the conference call with investors, McCoy, Brunswick's chief executive, also addressed the company's credit lines.

He said the company was already in talks with lenders to establish new revolving credit agreements but that it wanted to be "living out of our own pockets" by the end of 2008 and hoped it wouldn't have to access the revolvers during the first half of 2009.

Peter Hamilton, the company's chief finance officer, said Brunswick was "working hard on cash preservation" and McCoy refused to rule out a possible change in dividend policy as the company works to build a "fortress-like" balance sheet.

"They pay out $53 million in dividends," said Wolff at Rochdale Securities. "So there is that source of cash if things get really bad."

(Reporting by James Kelleher; Editing by Bernard Orr)