Superior Industries to Close Kansas Plant, Reduce Work Force at Other U.S. Plants

Following the completion of a strategic review, Superior Industries has said it will take two significant actions to reduce costs and balance its manufacturing capacity in the face of reduced demand for SUVs and light trucks. The company will close its manufacturing facility in Pittsburg, Kan., effective Dec. 19, which will result in a reduction of approximately 600 employees. The company expects to incur severance and related costs as a result of this plant closure of approximately $1.8 million over the next six months.

VAN NUYS, Calif. – Following the completion of a strategic review, Superior Industries has said it will take two significant actions to reduce costs and balance its manufacturing capacity in the face of reduced demand for SUVs and light trucks.

The company will close its manufacturing facility in Pittsburg, Kan., effective Dec. 19, which will result in a reduction of approximately 600 employees. The company expects to incur severance and related costs as a result of this plant closure of approximately $1.8 million over the next six months. Asset impairment charges related to closing the facility have yet to be determined, but will be recorded in the current quarter ending Sept. 30. As of July 27, the net book value of manufacturing equipment at the Pittsburg location was approximately $13.2 million.

In addition, the company has cancelled 90 open positions and will lay off an additional 65 employees. The cost of severance related to this additional layoff is estimated to be $296,000.

Together, these two actions will result in a reduction of 755 positions, or 29 percent of Superior’s U.S. work force.

"Superior’s goal is to prosper not just survive as we work through one of the most challenging periods in the history of our industry. The essential actions announced today will enable us to maintain our strong leadership position now and well into the future, and to maintain our financial flexibility by protecting our cash-rich, debt-free balance sheet," said Chairman, CEO and President Steven Borick.

"We believe the move toward more fuel efficient vehicles is a permanent shift, not merely a temporary phenomenon. The change in the light truck/passenger car mix requires adjustments to Superior’s manufacturing architecture. The plant closure is necessary to eliminate excess wheel production capacity, enhance our overall efficiency and move production to other manufacturing plants to improve our global capacity utilization."

"We are acutely sensitive to the impact of these difficult but necessary actions on our employees, and we are taking a variety of steps to help ease the transition," Borick said.

For more information about Superior Industries, visit: www.supind.com.