Troubled trailer maker Wabash National Corp. of Lafayette, IN, has spun off its wholly owned European subsidiary, Europaische Trailerzug Beteiligungsgessellschaft mbH (ETZ), in what Wabash hopes will be the last step in its restructuring effort.
ETZ is the majority shareholder of Bayerische Trailerzug Gessellschaft fur Bimodalen Guterverkehr mbH (BTZ), a European RoadRailer operation based in Munich, Germany. RoadRailer is Wabash's brand name for intermodal freight trailers that can be moved via trucks and railways.
Richard Dessimoz, Wabash's acting CEO, said he believes the spin-off of the company's European subsidiary represents the completion of Wabash's restructuring initiatives, which started in September 2001. Those efforts included the closure of two trailer factories in Ft. Madison, IA and Scott County, TN, and the reduction of Wabash's used trailer inventory from $120 million down to $50 million. Some 2,000 workers were laid off as well.
Wabash has been in serious financial trouble since late last year. It lost $61.4 million in the third quarter of 2001, compared to income of $5 million in the same period of 2000, because of declining sales. For the first nine months of 2001, Wabash's net sales dropped by nearly 30% to $697 million, with losses rising to $97 million.
The closure of its two factories and a California parts distribution facility, along with the layoffs, forced Wabash to take a $40.5 million pre-tax restructuring charge last year – along with a $28.7 million pre-tax charge related to its reduction plans for used trailer inventories.