Briggs to close plants in Jefferson County; Grede Foundries files for bankruptcy
Briggs to close plants in Jefferson County
Briggs & Stratton Corp. has announced plans to close its manufacturing plants in Jefferson and Watertown, eliminating 430 jobs by fiscal 2010.
The work at the production facilities in Jefferson and Watertown will be consolidated into existing the company’s other U.S. engine and lawn and garden product facilities to optimize plant utilization and achieve better integration between engine and end-product design, manufacturing and distribution, the company said.
The company’s portable generator production will be moved to its plant in Auburn, Ala. Pressure washer manufacturing will be shifted to the company’s McDonough, Ga. operation. The home standby generator production, along with engineering research and develowpment, will be moved to the company’s plant in Wauwatosa.
In conjunction with the closing of the Jefferson and Watertown facilities, the company will incur a pre-tax $5.8 million charge in the fourth quarter, including $4.6 million of net asset impairments and approximately $1.2 million of employee-related charges for severance and pension costs.
The company estimates approximately $11.0 million of pre-tax savings from the consolidation of operations by fiscal 2011.
"The market volatility for our weather-dependent products, along with the current economy, constantly challenges us to find new ways to remain competitive," said Harold Redman, president of the Briggs Home Power Products Group. "Currently, we have available capacity in other Briggs & Stratton locations and can optimize our efficiency by moving Home Power Products manufacturing to these other locations within the United States."
Grede Foundries files for bankruptcy
Grede Foundries Inc. has filed a petition for reorganization under Chapter 11 of the United States Bankruptcy Code and has a potential "stalking horse" buyer willing to finance it until a public sale where other suitors can submit bids for the company.
Wayzata Investment Partners LLC of Wayzata, Minn., an investment adviser and manager of private investment funds with more than $5 billion in assets, has offered to provide a $45 million temporary loan facility to allow time for an orderly sale under the supervision of the Bankruptcy Court.
Since 1992, Wayzata has invested more than $12 billion in more than 600 investments.
The filing, made last week in the U.S. Bankruptcy Court for the Western District of Wisconsin, was driven by the impact of the current economic downturn on the company and its customers, particularly the automotive industry, said Grede board chairman Richard Koenings.
Koenings said the reorganization effort and asset sale will position the company for a turnaround as the nation emerges from the most difficult economic period it has seen in generations.
"The significant deterioration in the automotive and construction industries and the resulting impact on our company and the foundry industry in general require that we take this strategic action," Koenings said. "We have carefully explored many options, and believe a sale to a strong financial backer like Wayzata is the best way to effectively proceed in what has been an exceedingly difficult marketplace."
Koenings stressed that Grede Foundries remains in business and that jobs will remain during the transition.
"This move gives us the time to restructure while we continue to do business and operate our plants," he said. "Grede will continue to buy goods and services from its vendors, support its workforce and provide its customers with the same quality products and service they’ve come to expect from us. Our goal is to preserve and strengthen our business so that we can compete successfully in the future."
Wayzata has also agreed to make the first bid, sometimes called a "stalking horse" bid, for the company.
"Wayzata’s commitment shows their belief in the strength of the Grede name and its respected position in the foundry industry," Koenings said. "We appreciate Wayzata’s support for the company and look forward to working with them to complete this process and create a stronger future for Grede."
Grede says that it has already received inquiries from other parties that are interested in the company’s production capacity.
Koenings said that customers have been especially supportive and have offered to provide financial support. Grede expects the sale and related bidding process to move steadily through the court system, he said.
"We are deeply committed to doing everything necessary to put our company on solid footing as the nation begins to rise out of the worst economic conditions since the Great Depression," Koenings said.
"We look forward to continuing to do the quality work Grede Foundries has become known for in our nearly 90 years of business. Our customers very clearly want us to succeed and have been very supportive."
Grede Foundries Inc. specializes in ferrous metals: gray iron, ductile iron and specialty iron castings. It is headquartered in Brookfield and operates eight foundries in the United States serving the automotive, heavy truck, appliance and industrial markets.