INTERMET Announces Plans to Close Machining Plant
October 14 2004 - 7:43PM
PR Newswire (US)
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/
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