Tenneco to Close Nebraska Facility
US based automotive component supplier Tenneco Inc. reports it will close its original equipment ride control plant in Cozad, Nebraska as the company continues to restructure its operations globally. 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 2010. Currently 460 hourly and 40 salaried workers are employed at the Cozad plant; Tenneco states that Impacted employees will receive transitional assistance.
“We sincerely regret the impact this action will have on our employees at Cozad,” said Gregg Sherrill, chairman and CEO, Tenneco. “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 had originally announced plans to close one of its OE ride control plants in the United States as part of its global restructuring announcement in October 2008, but postponed this action in January 2009 in order to preserve cash during the height of the global economic crisis. The closure will generate an estimated US$8 million in annualised cost savings once completed, incremental savings to the $58 million restructuring program announced in October 2008. The company expects to record up to $20 million in restructuring and restructuring related charges – approximately $14 million in cash. Some $11 million of these charges will be recorded in the third quarter 2009, and the remainder in subsequent quarters through to third quarter 2010.