Exide Announces Additional Plant Closings, Other Restructuring
PRINCETON, N.J., March 30 Exide Technologies ,
the global leader in stored electrical energy solutions, announced today that
it is closing two additional automotive battery manufacturing plants as part
of its ongoing restructuring plan to reduce automotive production capacity in
North America. The company also announced further restructuring actions in
its European operations, including workforce reductions at two manufacturing
facilities and a reorganization of its transportation business sales force.
In September 2000, in connection with its acquisition of GNB Technologies,
the company announced a restructuring plan now expected to reduce annualized
costs by approximately $90 million. The actions announced today are part of
As a result of these announced actions, the company will record a pre-tax,
non-recurring charge of approximately $68 million in its fourth fiscal quarter
ending March 31, 2001, as well as record reserves of $14.5 million in
connection with the purchase accounting for the GNB acquisition. In total,
approximately 950 employees will be affected worldwide.
Robert A. Lutz, Chairman and Chief Executive Officer of Exide
Technologies, said, "These actions are part of a difficult, but necessary,
program we initiated following our acquisition of GNB Technologies. We
believe these steps, when combined with our previous actions, will balance our
manufacturing capacity in North America and allow us to reduce overhead and
manufacturing costs in Europe. These actions are needed to improve
profitability in our transportation business."
The automotive battery plants to be closed are in Burlington, Iowa and
Dunmore, Pennsylvania. Approximately 500 employees will be affected. The
charge for the closure of the Burlington plant will be approximately
$14.4 million of which approximately $10.4 million will be cash. The cash
closure costs of the former GNB facility at Dunmore will be approximately
$14.5 million. Some of the production from Dunmore will be transferred to the
company's manufacturing plant in Shreveport, Louisiana.
As a result of these two plant closures and two previously announced plant
closures, the company's automotive battery capacity in North America has been
reduced by approximately 20 percent since the GNB acquisition.
The actions in the European transportation business include a planned
workforce reduction at the company's automotive battery plant in Cwmbran,
Wales, a writedown of related plant assets, and a planned restructuring of the
company's U.K. transportation business, including a reorganization of its
sales and logistics activities. The total charge for the U.K. restructuring
is approximately $31.7 million, of which approximately $3.4 million will be
cash. Additionally, the company announced plans for a restructuring of the
balance of its European transportation sales and marketing group. The total
charge for this plan is approximately $6.7 million for severance costs.
The company is also implementing a planned manufacturing workforce
reduction and writing down certain assets at a specialty industrial battery
business in Duisburg, Germany, which produces and sells nickel cadmium, nickel
metal hydride, silver-zinc and lithium batteries. Approximately $3.8 million
in charges are being taken related to this restructuring, of which
approximately $2.0 million is cash.
Also included in the total restructuring plan are several other actions
for which a charge of approximately $11.4 million will be taken, of which
approximately $8.8 million will be cash.
For the total restructuring program, announced in three stages since the
acquisition of GNB Technologies in September 2000, the company expects
annualized benefits of approximately $90 million. Cash costs associated with
these activities are now estimated to total approximately $88 million of which
approximately $27 million has been expended to date and $61 million is
expected to be spent over the next 18 months.
Since its acquisition of GNB, Exide has now completed the following
restructuring and/or integration objectives:
-- The closing or sale of three distribution facilities;
-- The closing of more than 60 branches in North America;
-- The closing of the Maple, Ontario automotive battery facility and its
currently in-process conversion to industrial battery production;
-- The closing of its automotive battery manufacturing plant in Dallas,
-- Reductions in overhead staff and establishment of shared service
centers in North America and Europe.