Wabash National Corp has announced a cost reduction that includes closing three locations and a reduction of the company's workforce by 900 employees.
The cost-reduction plan has been approved by the Wabash board of directors. It involves closing trailer plants in Scott County TN and Fort Madison IA. A parts distribution facility in Montebello CA also will close.
As a result of the plan, Wabash expects to take a one-time pre-tax charge of about $40 million during third-quarter 2001. In addition, the company plans to implement actions immediately that will substantially reduce its inventory of used trailers.
Mark Holden, vice-president and chief financial officer, said Wabash has about $100 million of used trailers in inventory. He anticipates trade-ins will produce as much as an additional $50 million in used trailers before the end of the year.
“We expect the total pre-tax charges related to our restructuring and cost-reduction plans and used trailer inventory reductions will be approximately $68 million, of which less than $5 million pre-tax will be cash-related charges,” Holden said. “We also expect these actions will result in annual pre-tax cost reductions of approximately $75 million without significantly impacting our revenues.”