As a part of the strategic and operational action program announced in November 2006, a decision has been made to close Trelleborg Automotive’s operations in Peru, Indiana, in the US. Accordingly production is expected to continue until the end of 2008. The business that remains in the US will eventually be reassigned to other Trelleborg plants within the United States.

The decision will impact approximately 200 employees in the plant. In cooperation with employee representatives, as appropriate, an initiative is under way to support those employees in Peru, Indiana, impacted by the decision.

“Trelleborg is continuously monitoring the footprint and make changes when we see possibilities for improvements”, says Peter Nilsson, Trelleborg’s CEO and President. “This is valid in all parts of the group.”

“The downturn in the demand and the overall medium term prospects in the North American automotive market, as well as a challenging development for many of our input costs, requires us to adjust our capacity and improve our cost-structure in North America”, says Roger Johansson, President of the Trelleborg Automotive Business Area.

The costs for the closure of the plant in Peru, Indiana, are expected to amount to approximately SEK 110 M before tax, of which SEK 60 M will impact cash and bank balances in 2008. The costs will mainly be charged against earnings in the third quarter of 2008. The positive earnings effect is expected to amount to about SEK 40 M before tax annually on full impact from 2009.

The total costs for both action programs within Trelleborg Automotive from November 2006 and April 2008 amount to approximately SEK 1,275 M before tax, of which approximately SEK 1,050 M was expensed during the period 2006 through mid-year 2008. The remaining amount of approximately SEK 225 M – of which SEK 110 M is attributable to the project announced today – will be mainly charged to earnings in the third and fourth quarters of 2008. The following actions have been taken in the programs:

- closure and relocation in Trowbridge, UK
- closure and relocation in West Thurrock, UK
- divestment of operations in Coventry, UK
- closure of a unit in Fergom, Italy
- closure and relocation of parts of Fluid Solutions in Nantes, France
- closure in Peru, Indiana, US
- rationalization and staff reductions within operations in Western Europe, including operations in Mannheim and Mutzschen, Germany.

Courtesy: Trelleborg AB, Sweden

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Posted by Naresh Koshti on 12 August, 2008 4:46:26 PM IST #