Tenneco is to close its original equipment (OE) ride control plant in Cozad, Nebraska, as the company continues to restructure its operations globally, putting 500 jobs at risk
“We sincerely regret the impact this action will have on our employees at Cozad,” said chairman and CEO Gregg Sherrill.
“However, we now feel that industry conditions have stabilised enough for us to move forward on our original plans to consolidate our ride control capacity in the United States, which we need to do in order to strengthen our long-term competitiveness in this critically important market.”
Tenneco currently employs 460 hourly and 40 salaried workers at the plant. The company expects to begin transferring current customer business to other ride control operations later this year, including Hartwell, Georgia, Paragould, Arkansas, and Celaya, Mexico.
Tenneco expects to complete the closure in the fourth quarter of 2010. Affected employees will receive “transitional assistance”, the company said.
It had originally announced plans to close one of its OE ride control plants in the US as part of its global restructuring announcement in October 2008, but postponed this to January 2009 in order to preserve cash during the height of the global economic crisis.
Tenneco estimated the closing would result in US$8m of cost savings a year once completed, incremental to the $58m restructuring programme announced in October 2008. The company expects to record up to $20m in restructuring and restructuring related charges – approximately $14m in cash. It will record $11m of these charges in the third quarter 2009, and the remainder in subsequent quarters to the end of third quarter 2010.