Tower Automotive to Relocate Ford Ranger Frame Production from Milwaukee to Bellevue, Ohio
GRAND RAPIDS, Mich.--May 27, 2003--Tower Automotive, Inc. , announced today that it will relocate the production of high-volume frame assemblies for the Ford Ranger currently performed at its Milwaukee facility to its Bellevue, Ohio, business unit.
This action is part of the company's continued efforts to improve its cost structure and return on invested capital.
"We deeply regret the adverse impact this action will have on our Milwaukee colleagues, but we are focused on continually improving our enterprise-wide efficiency. This action will result in improved returns on an existing frame platform," said Dug Campbell, Tower Automotive's chief executive officer.
The relocation of the Milwaukee Ranger production line will be completed by June 2004. The Company expects to realize annual cash savings, related primarily to reduced labor costs, of approximately $10 million following full completion of the move. Approximately 250 salaried and hourly colleagues in Milwaukee will be affected by the decision. Tower Automotive will continue to employ approximately 560 colleagues at the Milwaukee location. The company employs approximately 12,000 worldwide.
As a result of this move, the company will record pre-tax charges in the estimated range of $40 million to $50 million, or $0.47 to $0.59 per share (after-tax), over the next 12 months as the costs are incurred under the new timing recognition rules of Statement of Financial Accounting Standards No. 146, "Accounting for Costs Associated with Exit or Disposal Activities." The estimated charges include cash restructuring costs of approximately $16 million. In addition, the charges will include pension curtailment costs of approximately $13 million and non-cash asset write-offs of approximately $11 million to $21 million. The Company currently is evaluating whether any additional non-cash asset impairment charges will be required for the remainder of the Milwaukee facility.
About Tower Automotive
Tower Automotive, Inc., produces a broad range of assemblies and modules for vehicle structures and suspension systems for the automotive manufacturers, including Ford, DaimlerChrysler, GM, Honda, Toyota, Nissan, Auto Alliance, Fiat, Kia, Hyundai, BMW and Volkswagen. Products include body structural assemblies such as pillars and package trays, control arms, suspension links, engine cradles and full frame assemblies. The company is based in Grand Rapids, Mich., and has over 40 manufacturing and technical centers around the world, as well as joint venture operations in China, Japan and Mexico.
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from the anticipated results as a consequence of certain risks and uncertainties, including but not limited to general economic conditions in the markets in which Tower Automotive operates, and other risks detailed from time to time in the company's Securities and Exchange Commission filings.