USA: Tower Automotive changes plan on relocating Ford Ranger frame facility
Tower Automotive has reversed a plan to relocate a facility that produces Ford Ranger pickup truck chassis after the company was able to reassess the cost effectiveness of the plan, Dow Jones reported.
The company reportedly said that because of the reversal, it will reverse a pre-tax charge that it took related to the move in a subsequent period.
According to Dow Jones, Tower said that its plan to move its Ranger chassis operation from Milwaukee, Wisconsin, to Bellevue, Ohio, was announced in May.
Since then, the component maker has reached new labour agreements with its unions in Milwaukee, which has provided the company with more information on the cost effectiveness of the move, the report added.
Dow Jones noted that, during the second and third quarters, the company booked three charges related to the proposed move. One of them, a pre-tax $US7.7 million pension curtailment charge, will be reversed in a future quarter.
The other two charges that Tower took were a pre-tax $4.7 million cash restructuring charge and non-cash asset write-offs of $12.6 million, Dow Jones said.
The news agency said Tower, which is the sole producer of Ranger pickup chassis, has 800 workers at its Milwaukee facility and 140 workers at its Bellevue, Ohio, operation. About 250 of the Milwaukee workers make Ranger chassis, while employees in Bellevue produce chassis for other Ford vehicles.
Dow Jones noted that, in May, Tower expected annual cost savings of $10 million, a figure that was later reduced to $5 million, and, in addition, had expected $16 million in cash restructuring costs, along with related capital costs of $7 million in 2004.