NORTHVILLE, MI -- Hayes Lemmerz International is taking a series of actions that the company hopes will strengthen its competitive position, improve profitability and increase long-term value for its shareholders.

As part of a major restructuring strategy, the company plans to consolidate operations and reduce wage and benefit costs. A previously announced plant closure is also part of the restructuring.

Commenting on the announcement, Curtis Clawson, president, chief executive officer and chairman of the board said, "The last several years have seen profound changes in the competitive landscape of the automotive industry. We are aligning our organization to recognize the realities in the U.S. and to assure continued success in the global automotive marketplace."

The company is consolidating its Suspension Components, Automotive Brake and Powertrain Components business units, creating an Automotive Components Group. This move, aimed at improving the company's market focus and streamlining its organizational structure, will result in a reduction of approximately 45 employees. Also as part of this reorganization, the company appointed Daniel Sandberg to the new position of president of the Automotive Components Group. Sandberg had been president of the Automotive Brake and Powertrain Components business unit.

The company is also reducing several of its employee wage and benefit programs, primarily at its U.S. locations. These actions include reducing base pay up to 7.5 percent for its U.S. employees, 10 percent for the company's president and chief executive officer and 20 percent for the company's board of directors. Hayes Lemmerz is also temporarily suspending company contributions to employee 401(k) plans and restructuring its short term incentive compensation plans for hourly and salaried employees.

"While the wage and benefit changes are difficult, they are necessary for our business to effectively compete against foreign competition," said Clawson. "The actions announced today will reduce our operating costs, and as part of Hayes Lemmerz' overall cost-improvement initiative, help increase the long-term value of the company. We're being fiscally responsible, while continuing to provide a fair and competitive compensation package."

As announced in January, the company realigned its wheel business to strengthen coordination and synergies worldwide. The move combined the company's North American and International Wheel business units, creating a Global Wheel Group. This move has already resulted in a reduction of more than 15 percent of its staff in the U.S., in the first quarter of 2006.

In March, the company announced plans to close its aluminum wheel manufacturing facility in Huntington, IN. Remaining production will be transferred to the company's other aluminum wheel facilities in North America. The Huntington facility will operate through the company's second quarter of 2006 to service existing contracts and assist in transitioning production. The decision to close the plant was part of the company's ongoing plan to maximize capacity utilization and overall cost efficiencies. About 185 employees will be affected by this action.

Hayes Lemmerz expects the combined cost savings from all of the restructuring actions, including the wage and benefit reductions, to generate annual cost savings of at least $35 million. The company expects sales for 2006 to be approximately $2 billion, primarily due to reductions in North American volumes.

For more information about Hayes Lemmerz, go to: hayes-lemmerz.com .

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