Restructuring Lear may close 20 plants
SOUTHFIELD, MICH. - Auto supplier Lear Corp. may close as many as 20 plants as part of a restructuring, beginning with five facilities in North America and Europe.
The company said in a June 27 announcement that it is eliminating excess capacity, lowering operating costs and aligning capacity with demand. The changes may include layoffs and moving certain manufacturing operations to lower-cost countries.
Full details on the restructuring plan will be announced when Southfield-based Lear releases its second-quarter financial results July 29. Lear makes interior parts, including instrument panels, door panels and center consoles. About $1.1 billion of its total $17 billion in global sales comes from injection molding in North America.
Lear is the latest company in the North American auto industry making changes to improve its bottom line.
General Motors Corp. and Ford Motor Co. - Lear's biggest customers - have cut production in the wake of a slowdown in sales, particularly of high-profit sport utility vehicles, noted Martin King, a Standard & Poor's credit analyst. The New York ratings agency put Lear on credit watch, with the potential to lower its investment rating of BBB- if S&P senses problems with the restructuring strategy.
Lear does have ample liquidity, though, S&P noted, unlike competitor Collins & Aikman Corp. of Troy, Mich., which filed for Chapter 11 protection in May.
Meantime, Visteon Corp. is spinning off 24 plants to an independent company controlled by former parent Ford as its reduces its overall production size, narrows its manufacturing footprint and tries to control overall costs.
Lear posted $4.3 billion in sales for the first quarter, with profit of $15.6 million, down from sales of $4.5 billion with a profit of $91 million for the same period a year earlier.
In April, Lear said it was on track for sales of between $17.5 billion and $17.7 billion for the year, which would be a boost over the 2004 total of $17 billion.
However, the restructuring will cost the company in the short term, with Lear officials estimating pretax costs of $250 million. The company will provide revised financial guidance for its 2005 expectations when it lays out its restructuring plans at the end of July.
Firestone relocating Ky. polyiso facility
INDIANAPOLIS - Firestone Building Products Co. is moving a polyisocyanurate plant from Covington, Ky., to nearby Florence, Ky.
Firestone will replace a 70-foot laminator with a 100-foot model, and will invest ``north of $10 million'' for the project, said Michael Gorey, president of Indianapolis-based Firestone BPC and chief executive officer of parent firm BFS Diversified Products LLC.
Polyiso is used as roof insulation. It is processed on a moving line and formed by the combination of polyol, pentane (a blowing agent) and methylene diphenylene diisocyanate. It is a form of polyurethane, but more brittle and with greater fire resistance than more-rigid forms.
Firestone BPC has eight plants dedicated to polyiso production, in Kentucky, Colorado, Connecticut, Florida, Pennsylvania, Texas, Utah, and Wisconsin.
The 352,000-square-foot Florence site is 215,000 square feet larger than the Covington plant.
The company is assessing its staff needs at the new plant, Gorey said in an telephone interview. All Covington employees are being transferred to Florence; the towns are five miles apart.
Firestone has not decided the fate of the Covington site. It may be sold or used as a warehouse, Gorey said.
James Hoff, vice president of quality, technology, and product development, said neither the state of Kentucky nor Boone County offered Firestone BPC any tax incentives or grants for the relocation.
Simonton opening fabrication site in Ga.
PARKERSBURG, W.VA.- Simonton Windows, a Parkersburg-based window manufacturer, is opening a fabrication plant in Lyons, Ga.
The 100,000-square-foot facility will employ 85 when it opens this fall and 150 in two to three years, according to the company.
Jody Garrett, vice president of manufacturing, said the plant tentatively will house three to five fabrication lines and will make both aluminum and vinyl windows.
Garrett said Lyons was selected for its accessibility to the interstate and clients in the Southeast, and its workforce.
Bill Mitchell, president of the Toombs-Montgomery County Chamber of Commerce, said Simonton has been offered tax incentives and grants, contingent on reaching the investment trigger of $10 million and hiring goals.
Simonton already had disclosed plans to expand a plant in McAlester, Okla., adding two extrusion lines and 40 employees.