"We are continuously seeking ways to enhance product quality, broaden customer service and focus on our core strengths," said Chairman and CEO Larry Yost. "At the same time, we are proactively responding to changes in the markets we serve, including the planned downturn in North American truck production."
The company expects to reduce operating costs by about $21 million annually. The changes will require a net cash outlay of about $10 million and will result in a restructuring charge of approximately $26 million in its third fiscal quarter ending June 30. About $19 million of the $26 million relates to employee severance benefits.
Yost said Heavy Vehicle Systems will account for approximately 60% of the restructuring charge, primarily for staff reductions and the elimination of excess manufacturing capacity. The remaining 40% relates to Light Vehicle Systems, where he said they expect to improve operating efficiencies by combining activities.