INTERMET Announces Plans to Close Sturtevant Plants
December 15 2004 - 9:42AM
PR Newswire (US)
INTERMET Announces Plans to Close Sturtevant Plants High costs and
underutilized capacity cited as factors; concessions package
rejected by union workers TROY, Mich., Dec. 15
/PRNewswire-FirstCall/ -- INTERMET Corporation (INMTQ.PK) announced
today that it intends to close its Racine (die-casting) Plant and
Racine Machining Plant, both of which are located in Sturtevant,
Wisconsin. The plants are expected to close during the second
quarter of 2005. The facilities currently employ 603 people,
including hourly and salaried staff, and manufacture aluminum die
castings for the automotive industry. 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. Commenting on today's announcement,
INTERMET's Chairman and CEO Gary F. Ruff 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." Company officials
are notifying plant employees of the decision to close the plants
and will be meeting with representatives of UAW Local 627 to
discuss the effects of the closures. The company expects to record
costs related to the closures of $13 million to $16 million during
the fourth quarter of 2004, and expects to incur additional related
costs during the wind-down period. About INTERMET With headquarters
in Troy, Michigan, INTERMET Corporation is a manufacturer of
powertrain, chassis/suspension and structural components for the
automotive industry. The company has approximately 5,800 employees
worldwide. More information is available on the Internet at
http://www.intermet.com/ . Specific information relating to the
Chapter 11 cases filed by INTERMET and certain of its domestic
subsidiaries can be found on the Internet at
http://www.administar.net/ . Cautionary Statement This news release
includes forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. The words
"intends," "expected," "expects," and similar words and expressions
identify forward- looking statements. These statements are not
guarantees of future performance but instead involve various risks
and uncertainties. INTERMET's actual results may differ materially
from those suggested by its forward-looking statements due to
factors such as: the economic cost, management distraction and lost
business opportunities associated with bankruptcy proceedings;
INTERMET's ability to consummate its anticipated DIP financing; the
high cost of scrap steel and the possibility that scrap steel costs
will remain at high levels or continue to increase, which would
have further negative effects on INTERMET's profitability, cash
flow, liquidity and ability to borrow; fluctuations in the cost of
other raw materials, including the cost of energy, aluminum, zinc,
magnesium and alloys, and INTERMET's ability, if any, to pass those
costs on to its customers; pricing practices of INTERMET's
customers, including changes in their payment terms resulting from
the discontinuation of early payment programs and continuing
demands for price concessions as a condition to retaining current
business or obtaining new business, and the negative effect that
price concessions have on profit margins; changes in procurement
practices and policies of INTERMET's customers for automotive
components, including the risk of the loss of major customers or
the loss of current or prospective vehicle programs as a result of
INTERMET's financial condition and prospects (or otherwise);
possible inability to close unprofitable plants or to transfer work
from one plant to another because of the related costs or customer
requirements; general economic conditions, including any downturn
in the markets in which INTERMET operates; fluctuations in
automobile and light and heavy truck production, which directly
affect demand for INTERMET's products; deterioration in the market
share of any of INTERMET's major customers; fluctuations in foreign
currency exchange rates; work stoppages or other labor disputes
that could disrupt production at INTERMET's facilities or those of
its customers; continuing changes in environmental regulations to
which INTERMET is subject, and the costs INTERMET will incur in
meeting more stringent regulations; factors or presently unknown
circumstances that may result in impairment of INTERMET's assets,
including further write-downs of its goodwill; and other risks as
detailed from time to time in INTERMET's periodic SEC reports.
DATASOURCE: INTERMET Corporation CONTACT: Mike Kelly of INTERMET
Corporation, +1-248-952-2500 Web site: http://www.intermet.com/
http://www.administar.net/
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