Accuride will consolidate its aluminum wheel making facilities in part two of its restructuring plan, a move that is expected to save the company $5.6 million next year and more than $15 million a year after that.
"As a means to eliminate significant fixed overhead costs and to best streamline the production of aluminum wheels, we have made the decision to close our Cuyahoga Falls, Ohio, aluminum wheel manufacturing facility," said Bill Lasky, Accuride's president and CEO. "Manufacturing equipment from this facility will be relocated to our Erie, Pa., aluminum wheel facility. This consolidation will allow us to increase the efficiency of our operations, decrease costs, and ensure competitiveness while not impacting our ability to meet customer needs during peak industry build levels."
Accuride will maintain production in Cuyahoga Falls until all customer orders can be fulfilled through production at Accuride's Erie facility. Consolidation of the aluminum wheel operations should be completed by the close of the third quarter of 2009. Currently, the Cuyahoga Falls facility employs approximately 130 workers.
The company also will redeploy some of its component manufacturing equipment for cost reductions in logistics and other operational efficiencies.
Total costs associated with the Phase Two restructuring over the next five quarters include approximately $16.3 million in expenses plus $10 million in capital expenditures. The company expects $8 million of cash expenses, including severance of $4.1 million, relocation of $2.9 million, and lease cost of $1.0 million. Accuride will recognize $2.2 million of severance costs in the fourth quarter of 2008 which will impact cash in 2009. In addition, the company will recognize a non-cash write off / accelerated depreciation of approximately $8.3 million related to the decommission of assets.
In September, Accuride announced leadership changes and other restructuring changes, including the creation of an aftermarket division, designed to improve its competitiveness. (See "Accuride Announces Changes to Improve Competitiveness," 9/24/2008.) Last month, the company's stock was suspended from trading on the New York Stock Exchange, because it fell below the NYSE's continued listing standard regarding average global market capitalization.
"Going forward we will continue to evaluate and pursue initiatives that will further reduce our cost structure," Lasky said.
"As a means to eliminate significant fixed overhead costs and to best streamline the production of aluminum wheels, we have made the decision to close our Cuyahoga Falls, Ohio, aluminum wheel manufacturing facility," said Bill Lasky, Accuride's president and CEO. "Manufacturing equipment from this facility will be relocated to our Erie, Pa., aluminum wheel facility. This consolidation will allow us to increase the efficiency of our operations, decrease costs, and ensure competitiveness while not impacting our ability to meet customer needs during peak industry build levels."
Accuride will maintain production in Cuyahoga Falls until all customer orders can be fulfilled through production at Accuride's Erie facility. Consolidation of the aluminum wheel operations should be completed by the close of the third quarter of 2009. Currently, the Cuyahoga Falls facility employs approximately 130 workers.
The company also will redeploy some of its component manufacturing equipment for cost reductions in logistics and other operational efficiencies.
Total costs associated with the Phase Two restructuring over the next five quarters include approximately $16.3 million in expenses plus $10 million in capital expenditures. The company expects $8 million of cash expenses, including severance of $4.1 million, relocation of $2.9 million, and lease cost of $1.0 million. Accuride will recognize $2.2 million of severance costs in the fourth quarter of 2008 which will impact cash in 2009. In addition, the company will recognize a non-cash write off / accelerated depreciation of approximately $8.3 million related to the decommission of assets.
In September, Accuride announced leadership changes and other restructuring changes, including the creation of an aftermarket division, designed to improve its competitiveness. (See "Accuride Announces Changes to Improve Competitiveness," 9/24/2008.) Last month, the company's stock was suspended from trading on the New York Stock Exchange, because it fell below the NYSE's continued listing standard regarding average global market capitalization.
"Going forward we will continue to evaluate and pursue initiatives that will further reduce our cost structure," Lasky said.
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