Accuride to Close Aluminum Wheel Plant

Dec. 16, 2008
Restructuring aims to save $5.6 million in 09; $15.4 million/year in future

Accuride Corp. will cease manufacturing aluminum wheels at its plant in Cuyahoga Falls, OH, and combine the equipment and operations from there with its Erie, PA, plant. About 130 workers will be affected by the plant closing. "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," stated Bill Lasky, Accuride president and CEO.

Accuride manufactures commercial-vehicle components and assemblies, including wheels, wheel ends, parts for truck bodies and chassis, seating assemblies, and others, under the Accuride, Gunite, Imperial, Bostrom, Fabco, and Brillion brand names.

The company also announced it will relocate some component manufacturing equipment from Cuyahoga Falls, which it says will save logistics costs and lead to other operating efficiencies.

The Ohio plant will remain in operation until current orders are filled, but the consolidation will be completed by the end of the third quarter of 2009. "Going forward we will continue to evaluate and pursue initiatives that will further reduce our cost structure," according to Lasky.

Accuride is instituting a restructuring plan — it calls it the Phase Two restructuring — which it says will significantly reduce its fixed costs and increase efficiencies. The plan will cost approximately $26.3 million, of which $10 million are projected capital expenditures. However, the company estimates that the restructuring will save it $5.6 million in 2009, and will lead to annual cost savings of approximately $15.4 million in subsequent years.

In a November conference call announcing Accuride’s third-quarter 2008 earnings, Lasky hinted at the cost-saving projections of the Phase Two restructuring. He also said the company had “stepped up the integration of our sales and marketing efforts,” intending to improve the brand value of Accuride, Gunite, Bostrom, Imperial, Fabco, and Brillion products.

However, Lasky indicated to analysts that the company was producing “a few products that we really don’t need to be in. They’re good, they’re profitable; they just don’t fit Accuride as well as they would another company.”