Tenneco is to close its original equipment ride control plants in Owen Sound, Ontario and Hartwell, Georgia as part of what it says is an “initiative to realign its manufacturing footprint.”
The company expects to begin transferring current customer business primarily to its ride control facility in Kettering, Ohio, later this year. Tenneco expects to complete the closure of the two facilities near the end of the second quarter of 2020.
“Today’s actions to realign our North American ride control operations will strengthen our long-term competitiveness in this critically important region,” said Tenneco co-CEO, Brian Kesseler.
“We recognise the impact this action will have on our employees and are working with the local communities to provide transition assistance for all affected employees, including opportunities to transfer to other Tenneco locations.”
The company estimates the restructuring actions will generate between US$20m and $25m in annualised savings starting by the end of 2020. Restructuring and related charges are expected to be in the range of $70m and $85m, with $20m to $30m occurring in the fourth quarter of 2018.
The charges comprise between $40m and $50m of cash expenditures (including severance payments to employees, the cost of decommissioning and starting up equipment, and other costs associated with the action) and between $30m and $35m of non-cash asset write-downs and other costs.