LAKE FOREST, Ill. — Tenneco said today it is postponing its plans to close an original equipment (OE) ride control plant in the United States as part of the company’s current global restructuring program. The company said it intends to accelerate efforts to maximize efficiency and flex operations at its Cozad, Neb., and Hartwell, Ga., OE ride control plants in lieu of closing one of these facilities at this time.
“This change will allow Tenneco to further preserve cash in response to the unpredictability of the current global economic crisis while still capturing 90 percent of the original planned savings,” said Gregg Sherrill, chairman and CEO, Tenneco.
The company now expects to generate $58 million in annualized cost savings, once the revised restructuring program is fully implemented by the end of 2009, and record approximately $31 million in restructuring and restructuring related charges – approximately $25 million in cash. The company will record $23 million of these charges in the fourth quarter 2008 and the remainder through 2009.
Under the original global restructuring plan, which the company announced last October, Tenneco expected to generate $64 million in annualized cost savings and record up to $60 million in charges, approximately $44 million in cash.
The company said other major elements of its global restructuring program remain on track, including the closing of its Dunsborough, Australia, engineering operation and three other manufacturing facilities in North America, as well as the restructuring of a North American OE emission control manufacturing facility. The company’s Milan, Ohio, elastomer facility and its Evansville, Ind., OE emission control just-in-time facility will be closed, along with its Emigsville, Pa., OE emission control just-in-time facility, the company announced today.
Despite these changes, Tenneco said it still expects its restructuring program to eliminate approximately 1,100 positions (500 salaried and 600 hourly) worldwide.
“Long term, we need to consolidate our ride control capacity in the United States to further strengthen our competitiveness,” Sherrill said. “We will continue to evaluate this and other restructuring opportunities worldwide and be ready to take action when industry and economic conditions stabilize.”
