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Citation Exiting Permanent/Semi-Permanent Molding

April 26, 2008
Sells Indiana foundry to Diversified Machine Inc.

Citation Corp. is closing its aluminum foundry in Butler, IN, and plans to sell the permanent and semi-permanent molding equipment there to Diversified Machine Inc. Citation describes the decision as part of a long-range strategy to improve its efficiencies and “core competencies.”

Last April, a federal bankruptcy court granted Citation’s request for a “pre-packaged” bankruptcy, which the company said was an effort to rebuild its financial base. At that time, Citation said its strategy included investments in “core business segments.” The group emerged from a previous bankruptcy reorganization in 2005.

Of the decision to close the Butler foundry, CEO Doug Grimm stated: “Exiting permanent and semi-permanent molding allows us to focus on the growing sectors of our foundry business. This strategic decision supports capital investments we’ve made in our ductile iron and diecasting businesses, and positions Citation to better support our customers served by these core business areas.”

Diversified Machine will install the permanent and semi-permanent molding equipment at its plants in Bristol, IN, and Milwaukee.

DMI produces various automotive powertrain components (including intake manifolds, cylinder heads, and exhaust manifolds) at six locations in Michigan, Indiana, and Wisconsin. The DMI plant in Milwaukee is the former Aluminum Casting & Engineering Co. Inc., which was acquired in December 2007. Its operations include semi-permanent molding, Isocure coremaking, sand casting, heat-treating, trimming and finishing, impregnation, machining, and component assembly and testing.

The Butler foundry, which Citation acquired in 1996 through its purchase of Bohn Aluminum Corp., has manufactured aluminum suspension and brake components. “We continue to focus our strategy on opportunities that enable us to meet our long-term business objectives,” Grimm stated. “Divesting a non-core business is a logical step in that process and will ensure Citation remains a strong and viable company.”

In 2007, Citation sold its gray and ductile iron foundry in Skokie, IL, to Castwell Products L.L.C., and it sold a Texas steel forging operation to Balmoral Advisors. In 2006, Citation closed two foundries in Lake Zurich, IL, and Bay Minnette, AL.