Highland Heights, Kentucky --General Cable Corp., which manufactures copper, aluminum and optical fiber wire and ca...
May 28, 2002
Highland Heights, Kentucky –General Cable Corp., which manufactures copper, aluminum and optical fiber wire and cable products, is closing two of its seven North American manufacturing plants.
The plants, located in Monticello, Illinois and Sanger, California, employ approximately 200 associates and utilize more than 350,000 square feet in the production of service wire sold to the telecom industry.
The company has also sold its small, non-strategic, UK-based specialty cables business, and has formed a joint venture company to manufacture and market fiber optic cables. General Cable plans to record an additional charge related to its discontinued building wire and retail cordset operations in the second quarter of 2002.
As a result of these actions, the company expects to report in its second quarter 2002 results for its continuing operations a $20 to $25 million non-recurring pre-tax charge of which approximately $7 million will be cash costs, and a $6.0 million pre-tax charge for discontinued operations, of which approximately $2.6 million will be cash.
“The prolonged downturn in the demand for communications cables provided the opportunity for us to further enhance our cost leadership in these products,” said Gregory B. Kenny, president and CEO of General Cable. “We believe that the relocation of the productive capacity from these plants to other existing facilities will allow us to significantly reduce our fixed costs while also retaining productive capacity for the eventual rebound in demand for communications products. At the current levels of production, the plant closures are expected to generate a net cash positive result in less than one year.”
Kenny said that if the company’s current level of telecom spending for exchange cables extends through the summer, it would reduce production levels in its two domestic telephone exchange cable plants beginning in the third quarter.