Intermet (NASDAQ:INMTQ)
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INTERMET Announces Plans to Close Machining Plant
Capacity rationalization and cost reduction identified as factors
TROY, Mich., Oct. 14 /PRNewswire-FirstCall/ -- INTERMET Corporation (Pink
Sheets: INMTQ) announced today that it intends to close its Columbus Machining
Plant in Midland, Georgia, during the first quarter of 2005. The company said
the closure is necessary to rationalize excess production capacity and reduce
costs.
The facility currently employs 86 people, including hourly and salaried staff,
and machines ductile-iron and light-metal castings for the automotive industry.
INTERMET expects total sales of about $12.0 million from the Columbus
Machining Plant in 2004.
"This is a necessary decision for the company to make at this time," said
Chairman and CEO Gary F. Ruff. "The plant has been operating at a much-
reduced capacity with very high overhead costs."
Ruff said that INTERMET's objective for the future is to consolidate machining
and assembly operations into dedicated areas in its casting facilities, as is
presently the case with the company's Light Metal Group. "This allows for
better utilization of lean manufacturing and one-piece flow concepts. As such,
it is our intention to move certain strategic Columbus Machining programs into
other INTERMET facilities, such as the Columbus Foundry. However, some work
will be outsourced. In either case, INTERMET will retain its Tier-1 position."
The closure of the Columbus Machining Plant is part of the restructuring plan
being developed by INTERMET and its financial advisor Conway MacKenzie &
Dunleavy in connection with the company's Chapter 11 reorganization.
About INTERMET
With headquarters in Troy, Michigan, INTERMET Corporation is a manufacturer of
powertrain, chassis/suspension and structural components for the automotive
industry. The company has approximately 6,000 employees worldwide. More
information is available on the Internet at http://www.intermet.com/ .
Cautionary Statement
This news release includes forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. The words "intends,"
"expects," and similar words and expressions identify forward-looking
statements. These statements are not guarantees of future performance but
instead involve various risks and uncertainties. INTERMET's actual results may
differ materially from those suggested by its forward-looking statements due to
factors such as: the economic cost, management distraction and lost business
opportunities associated with bankruptcy proceedings; INTERMET's ability to
consummate its anticipated DIP financing; the high cost of scrap steel and the
possibility that scrap steel costs will remain at high levels or continue to
increase, which would have further negative effects on INTERMET's
profitability, cash flow, liquidity and ability to borrow; fluctuations in the
cost of other raw materials, including the cost of energy, aluminum, zinc,
magnesium and alloys, and INTERMET's ability, if any, to pass those costs on to
its customers; pricing practices of INTERMET's customers, including changes in
their payment terms resulting from the discontinuation of early payment
programs and continuing demands for price concessions as a condition to
retaining current business or obtaining new business, and the negative effect
that price concessions have on profit margins; changes in procurement practices
and policies of INTERMET's customers for automotive components, including the
risk of the loss of major customers or the loss of current or prospective
vehicle programs as a result of INTERMET's financial condition and prospects
(or otherwise); possible inability to close unprofitable plants or to transfer
work from one plant to another because of the related costs or customer
requirements; general economic conditions, including any downturn in the
markets in which INTERMET operates; fluctuations in automobile and light and
heavy truck production, which directly affect demand for INTERMET's products;
deterioration in the market share of any of INTERMET's major customers;
fluctuations in foreign currency exchange rates; work stoppages or other labor
disputes that could disrupt production at INTERMET's facilities or those of its
customers; continuing changes in environmental regulations to which INTERMET is
subject, and the costs INTERMET will incur in meeting more stringent
regulations; factors or presently unknown circumstances that may result in
impairment of INTERMET's assets, including further write-downs of its goodwill;
and other risks as detailed from time to time in INTERMET's periodic SEC
reports.
DATASOURCE: INTERMET Corporation
CONTACT: Investor Inquiries: Bytha Mills, or Media Inquiries: Mike
Kelly, of INTERMET Corporation, +1-248-952-2500
Web site: http://www.intermet.com/