Wabash National Corp., announced today it is letting go 900 employees, about 20% of its workforce, and will close two assembly plants and a distribution center because of lower heavy-truck sales.
The Lafayette, IN-based company, which makes trailers under the Wabash and Fruehauf names, will close factories in Ft. Madison, IA and Scott County, TN and its Montebello, CA distribution center.
“These decisions are very difficult because they affect hardworking associates,” Wabash CFO Mark Holden said. “However, since existing poor market conditions have shown no signs of near-term improvement, the restructuring and cost reduction plans are important to the company's future in order to align its cost structure with the market.”
Wabash plans to take $68 million in pretax charges to cut the jobs and eliminate trailer inventory. Holden says Wabash has approximately $100 million of used trailer inventories and anticipate receiving up to $50 million in used trailer trade-ins before the end of the year.
“We believe our business simply can no longer support these levels of used trailers and the associated infrastructure costs,” Holden said.
A recent report by the Federal Reserve said that overall industry capacity in the U.S. fell to 77% in July, representing the lowest level of utilization since August 1983. Holden said that given those conditions, Wabash believes the restructuring and cost reduction plans will put the company in a stronger position.
The company also announced today that it has names Arthur R. Brown as its vp and COO, and that it has hired Heidrick & Struggles International Inc., an executive search firm, to assist it in identifying internal and external candidates for its vacant CEO position.