Columbus McKinnon Corporation (CM) announced on Monday 4 June that it will close its Yale Hoist manufacturing facility located in Forrest City, Arkansas, USA, before March 2002.
The closure follows the rationalisation and transfer of hoist products to other CM facilities, the company said.
CM will take an $8.8m pre-tax charge in its first quarter results, mainly as a result of the cost of terminating the lease. Annualised recurring pre-tax cost savings expected to result from this action are estimated at $7.25m.
“While it is always a difficult decision to close a facility,” said Timothy Tevens, president and chief executive officer. “The benefits of closing the Forrest City plant are significant and in the best interests of all of our stakeholders, and it is a further step in CM’s previously announced program of strategic initiatives designed to enhance shareholder value. We will be able to offer a number of affected associates positions in other CM locations and, for those who do not relocate, severance and outplacement help. Yale represents one of CM’s most recognised brands; Yale hoist products will continue to be marketed in North America and around the world. The process will begin immediately and we expect to vacate the Forrest City facility by the end of this fiscal year.” The company said that the plant closure was a continuation of its integration process resulting from its acquisition over the last six years of several major North American hoist producers. “Our integration process typically begins with economies that are readily available, such as business system implementation, consolidated purchasing, and other easily attainable revenue enhancements and cost reductions,” Tevens added. “Facility consolidation is always more complex and best done later in the integration process.” In addition, during recent months, CM has begun the process of consolidating several smaller facilities into larger CM facilities. Savings expected from this are estimated at $850,000 a year, with minimal implementation costs and no restructuring charges.
In addition to the rationalisation process, CM says that it has also begun to adopt lean manufacturing improvement activities in a number of its facilities aimed at improving productivity, reducing inventory, and freeing up manufacturing space, while improving or maintaining high levels of customer service.
