Wabash Closing Lines Outside Ind.
LAFAYETTE, Ind. (AP) _ Wabash National Corp. executives are bracing for a long-term slump by closing their truck-trailer production lines outside Indiana.
The closing of two assembly plants and a warehouse cost about 900 people their jobs _ about 20 percent of Wabash’s work force.
The company also announced Thursday that it had hired a new chief operating officer and selected an executive search firm to help it find a new chief executive officer to replace company founder Jerry Ehrlich, 63, who stepped down in July. Wabash vice president Richard Dessimoz has been acting CEO. Ehrlich remains chairman of the board.
The new chief operating officer is Arthur R. Brown, 50, who most recently had been vice president of Fram/Autolite operations for Honeywell Corp., overseeing manufacturing operations in an eight-plant group.
The company said it would record a $40 million pretax charge in the third quarter to pay for the restructuring effort. It also will record a $28 million pretax loss to dispose of much of its used trailer inventory.
Mark R. Holden, the company’s chief financial officer, cited a Federal Reserve report that found only 77 percent of the nation’s industrial capacity in use during July, the lowest level since August 1983.
``Existing poor market conditions have shown no signs of near-term improvement,″ Holden said in a prepared statement.
Wabash is closing plants in Fort Madison, Iowa, and Huntsville, Tenn., and a warehouse in Montebello, Calif.
Wabash, which sells trailers under the Wabash and Fruehauf names, had announced in March it was laying off about 500 of the 3,300 workers at its Lafayette assembly plant.
The closings will leave Wabash with about 4,000 employees. Its only remaining factory outside Lafayette will be in Harrison, Ark., where it makes hardwood flooring for trailers, Holden said. Wabash also has about 50 retail and distribution sites around the country.
Wabash announced last month that it had lost $10.8 million, or 47 cents a share, on sales of $212.2 million during the second quarter. That compared with a profit of $7.5 million, or 31 cents a share, on sales of $358.7 million during last year’s second quarter.
Wabash’s stock rose 33 cents to close at $9.16 in trading Thursday on the New York Stock Exchange.
On the Net:
Wabash National Corp.: http://www.wabashnational.com/