Phase Two of Accuride's Restructuring Includes One Plant Closure and Redeployment of Equipment - aftermarketNews

Phase Two of Accuride’s Restructuring Includes One Plant Closure and Redeployment of Equipment

Company anticipates annual cost savings of $5.6 million in 2009 and $15.4 million annually thereafter.

EVANSVILLE, Ind. — Accuride Corp. has announced the second phase in its plan to significantly reduce its fixed costs and increase efficiencies through restructuring initiatives. Phase two will include the consolidation of the company’s aluminum wheel facilities and redeployment of equipment in its component businesses.

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 said it expects $8 million of cash expenses, including severance of $4.1 million, relocation of $2.9 million, and lease cost of $1 million.

The company will recognize $2.2 million of severance costs in the fourth quarter of 2008 which will impact cash in 2009. In addition, Accuride will recognize a non-cash write off/accelerated depreciation of approximately $8.3 million related to the decommission of assets. It is anticipated that the restructuring will save the company an estimated $5.6 million in 2009 and generate annual cost savings of approximately $15.4 million thereafter.

Bill Lasky, Accuride’s president and CEO, announced that the company will close its Cuyahoga Falls, Ohio, aluminum wheel manufacturing facility as a means to “eliminate significant fixed overhead costs and to best streamline the production of aluminum wheels.” 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,” said Lasky.

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.

Additionally, the company will redeploy some of its component manufacturing equipment. Through this relocation, the company will realize cost reductions in logistics and other operational efficiencies.

“Going forward we will continue to evaluate and pursue initiatives that will further reduce our cost structure,” added Lasky.

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