Hayes Lemmerz has announced further restructuring to strengthen its competitive position and improve profitability.
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President, chief executive officer and chairman Curtis Clawson: “The last several years have seen profound changes in the competitive landscape of the automotive industry. We are aligning our organization to recognise the realities in the US and to assure continued success in the global automotive marketplace.”
Among the changes, Hayes Lemmerz will consolidate its components operations into an automotive components group and reduce wage and benefit costs
It had already announced realignment of its wheel business into a global wheel group and rationalisation of its aluminium wheel manufacturing capacity in the US along with an amendment to its $625 million senior secured credit facility
Friday’s announcement concerned the consolidation of its suspension components business unit and its automotive brake and powertrain components business unit, creating an automotive components group.
Hayes Lemmerz said this would improve its market focus and streamline its organisational structure, though 45 staff would be axed.
Daniel Sandberg has been named president of the automotive components group, he previously headed the automotive brake and powertrain components business unit.
Revised Wage and Benefit Plans
The company is also reducing wages and benefits, primarily at US locations. This includes reducing base pay up to 7.5% for US employees, 10% for the company’s president and chief executive officer and 20% for the board of directors, temporarily suspending company contributions to employee pension plans and restructuring short term incentive compensation plans for both hourly and salaried employees.
The rationalisation of the wheel business, announced earlier, has already resulted in a reduction of over 15% of its staff in the US, in the first quarter of 2006.
“We will continue to look at additional efficiencies in the organization as capacity is adjusted and launches are completed,” said Fred Bentley, chief operating officer and president of the global wheel group.
Hayes Lemmerz expects the combined cost savings from all of the restructuring actions, including the wage and benefit reductions, to generate annual cost savings of at least $US35m.
