Intermet Plans to Close Two Plants After Union Rejects Concessions

High costs and underutilized capacity cited

Intermet Corp. reports it will close its Racine Plant, an aluminum diecasting operation, and Racine Machining Plant, both located in Sturtevant, WI, during the second quarter of 2005. The Troy, MI-based manufacturer of powertrain, chassis/suspension, and structural components, filed for bankruptcy in September.

“Continuing high costs at the facilities and a significant underutilization of current casting and machining capacity prompted the need for concessions, which were voted down by hourly employees represented by UAW Local 627 on Sunday, December 12, 2004,” Intermet stated.

About 603 are employed at the plants, including hourly and salaried staff. Intermet projected that the closing costs of the two plants will fall between $13 million and $16 million during the fourth quarter of 2004, and more “during the wind-down period.”

Gary F. Ruff, Intermet chairman and CEO, said, "Intermet's restructuring and turnaround plan called for significant changes in order to make the Sturtevant operations viable. Unfortunately, the final concessions offer we proposed to the union bargaining committee was not acceptable to the employees."

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