BRANTFORD, ONTARIO - Wescast Industries Inc. announced today that its Board of Directors has approved a restructuring plan for its North American operations that will significantly reduce operating costs and better align capacity with expected volume levels. This decision has been made in light of recent announcements by Wescast's major North American customers to significantly reduce production volumes.
As a result, Wescast expects to close its Wingham North Huron foundry operation and transfer that plant's production to its second Wingham foundry over the next few months. The two Wingham foundries operate under the same collective labour agreement and as such employees from both facilities will be affected. Wescast also has foundry operations in Oroszlany, Hungary and Wuhan, China.
"The very difficult decision to close the Wingham North Huron foundry came after a careful evaluation of our cost structure, expected future business volumes and available capacity in other facilities," said Ed Frackowiak, Wescast Chairman and Chief Executive Officer. "Those factors, combined with the severity of economic conditions facing the North American automotive industry, have led us to this course of action. We sincerely regret the impact this will have on our employees and the Wingham community."
Approximately 140 employees will be affected by the closure. The plant is expected to be closed by the end of the first quarter of 2009 and is estimated to result in annual fixed costs savings of approximately $10 million.
Restructuring charges associated with these significantly reduced production volumes are expected to be in the range of $60 million to $65 million. These charges will be reflected in the company's 2008 annual financial statements.