ATS To Close McAllen Manufacturing Plant As Part of
Precision Components Performance Enhancement Program
TSX: ATA
CAMBRIDGE, ON, Feb. 4 /CNW/ - ATS Automation Tooling Systems Inc. today
announced it is closing a small manufacturing facility in McAllen, Texas as
part of an ongoing program to enhance the performance of its Precision
Components Group ("PCG").
The plant closing will strengthen the economics of the Group's continuing
operations by eliminating overhead costs in McAllen and improving the capacity
utilization of the remaining PCG operations. The transfer of existing programs
from the McAllen facility into existing PCG facilities in the Cambridge area
is scheduled to be completed by June 2005. Management currently estimates that
the cash costs associated with moving the business will be approximately
$1 million. Non-cash charges may also be incurred by the Group depending on
the amount of value realized on disposition of certain assets in McAllen,
including the factory, which is owned by ATS, and other assets that may not be
transferred.
"We have determined this facility in McAllen is no longer strategically
important and closing it is a necessary step that reflects the realities of
today's automotive marketplace and our commitment to dramatically improve
Precision Components Group performance," said Klaus Woerner, ATS President and
Chief Executive Officer. "By assimilating its production into our existing
Precision Components operations, we expect to reduce overall PCG operating
costs near term, and achieve better capacity utilization and improved
economies of scale for the Group going forward while maintaining the level of
service and quality that our customers expect of ATS."
The benefits from this strategic initiative will complement the Company's
ongoing programs and initiatives aimed at significantly reducing costs and
improving profitability across all PCG operations. These initiatives include
increased global sourcing and procurement, efficiency improvement programs,
improved utilization of existing productive capacity, rationalization and
pricing strategies.
Corporate Description
ATS Automation Tooling Systems Inc. (www.atsautomation.com) is the
industry's leading designer and producer of turn-key automated manufacturing
and test systems, which are used primarily by multinational corporations
operating in a variety of industries including: automotive,
computer/electronics, healthcare, and consumer products. The Company also
makes precision components and sub-assemblies using its own custom-built
manufacturing systems, process knowledge and automation technology. ATS is
also an emerging leader in the rapidly growing market for solar energy cells
and modules. ATS employs approximately 4,000 people at 26 facilities in
Canada, the United States, Europe and Asia-Pacific. The Company's shares are
traded on The Toronto Stock Exchange under the symbol ATA.
Certain forward looking statements are made in this news release,
including statements regarding growth prospects for the business and the
impact of changes in management. Investors are cautioned that such
forward-looking statements involve risks and uncertainties, including, without
limitation, continued acceptance of ATS's products, technologies, customer
requirements and other risks detailed from time to time in ATS's periodic
reports filed with Canadian regulatory authorities.
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For further information: Ron Jutras, Executive Vice President, C.O.O. and Chief Financial Officer, (519) 653-6500