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Auto wheel maker to close plant, cut 29% of workforce

August 20, 2008|From Bloomberg News

Automotive wheel maker Superior Industries International Inc. said Tuesday that it planned to cut 29% of its U.S. workforce and shut a Kansas plant because of lower sales of pickups and sport-utility vehicles.

The Pittsburg factory will close Dec. 19, accounting for about 600 of the job cuts, the Van Nuys company said. Superior said it would eliminate 90 vacant positions and lay off 65 workers.

Suppliers of parts for pickups, vans and SUVs have lost business as rising U.S. gasoline prices have damped demand for the light trucks. Superior's first-half revenue fell 12% as it shipped 14% fewer wheels than a year earlier.

"We believe the move toward more fuel-efficient vehicles is a permanent shift, not merely a temporary phenomenon," Chief Executive Steven Borick said.

Severance and related costs for eliminating the 755 jobs will total about $2.1 million in the next six months, Superior said. Earnings this quarter also will be reduced by a yet-to-be-determined write-down for the plant closing, the firm said.

Superior gets 36% of its revenue from General Motors Corp., 33% from Ford Motor Co. and 15% from Chrysler, said Brett Hoselton, an analyst at Cleveland-based KeyBanc Capital Markets.

U.S. sales of pickups, vans and SUVs fell 19% through July. The total for cars and light trucks slid 11%.

Shares of Superior fell 17 cents to $18.68.

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