Haldex to rationalize North American production

Haldex announced on July 24 its intention to enter into negotiations with the International Association of Machinists and Aerospace Workers and key customers regarding the relocation of its core products manufactured at its factory in Paris, Tenn. The company expects to take a one-time charge against earnings in 2006 in anticipation of production rationalization which will be completed by January 2007.

The Paris facility was obtained by Haldex in an acquisition in 1998 and produces a range of products including components for air brake systems as well as clutches and products for hydraulic brake systems. Haldex intends to relocate production of the air brake systems components (which are a part of its core business) while seeking a purchaser for the Paris facility and the remaining product lines.

"Production rationalization is always a difficult and emotional process, but it is a necessary action in today's very competitive business environment," said Chuck Kleinhagen, executive vice president of Haldex and head of its Commercial Vehicle Systems Division. "By concentrating on production of our core product range in a smaller number of facilities and seeking a buyer interested in investing in the clutch and hydraulic brake parts product lines we hope to find a solution which is in the best long term interests of both Haldex and the employees in Paris."

The Paris facility employs 120 and Kleinhagen commented that the excellent past performance of the management and employees in Paris will be an asset in seeking an acquirer for the facility and certain product lines. He also expressed his appreciation for the past contribution of those employees to Haldex.

Haldex Commercial Vehicle Systems is a manufacturer and distributor of heavy-duty air brake system and suspension control system components. It operates globally with headquarters in Kansas City, Mo., and manufacturing and engineering facilities located in the United States, the United Kingdom, Sweden, Germany, Brazil, China, Hungary and India.