ROGERS, Ark. (July 31, 2014) — Alloy-wheel maker Superior Industries International Inc. is closing its wheel plant in Rogers as part of an initiative to reduce costs and enhance its global competitive position.
The company said it expects to cease operations at Rogers by year-end and move production to other Superior plants, including those in Fayetteville, Ark., and Chihuahua, Mexico.
Superior said 500 jobs will be eliminated in the move, resulting in up to $2.5 million in severance costs but which also should generate $15 million in labor cost savings year-over-year.
“This action follows a comprehensive review of the company’s cost position in what continues to be an intensely competitive environment,” said Don Stebbins, who joined Superior in May 2014 as president and CEO and member of the board of directors.
“Our board and management team remain focused on building an efficient, operationally stronger organization that can compete effectively with manufacturers around the globe. We appreciate the contributions of our team members at Rogers and will be providing assistance to them during the transition process,” Mr. Stebbins added.
At the close of Superior’s second quarter, the net book value of fixed assets and manufacturing equipment at the Rogers location was approximately $22 million, the company said.
Asset-related charges in connection with the closing have yet to be determined, but are expected to be recorded primarily in the third and fourth quarters of 2014.
At the same time, Superior reported that construction of a new plant in Chihuahua, Mexico, is on schedule, with commercial start-up expected during the first half of 2015.
Van Nuys, Calif.-based Superior claims to be the largest producer of aluminum wheels for passenger cars and light-duty vehicles in North America. It derives nearly all of its $800 million in annual revenue from OE sales to vehicle makers.
The company reported net income of $4.8 million in the quarter ended March 30 on 11-percent lower sales of $183.4 million. Superior attributed the sales decline to an 8-percent drop in unit sales to 2.8 million wheels and a 4-percent reduction in the average selling price.
The firm’s gross profit, however, improved 15.6 percent to $15.6 million, a gain Superior attributed to its “generally lower cost structure, specifically in the areas of labor, maintenance and supplies, due in part to improved efficiencies and benefits derived from capital improvements implemented during the past year.”
Do you prefer to buy domestically manufactured products?
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|That's just one of many criteria I consider||
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