Amid losses approaching $60 million during the first half of the year, Hayes Lemmerz International, Inc. has sold a European wheel factory and implemented other cost-cutting measures. The company is predicting a brighter future, citing a shift in its marketing strategy from pursuing American customers to seeking overseas sales. “The divestiture of our aluminum wheel facility in Hoboken, Belgium in June, the expected closure of our Gainesville, Ga., aluminum wheel facility and the planned divestiture of our powertrain facility in Nuevo Laredo, Mexico, will have a positive impact on our long-term financial performance,” says COO Fred Bentley. “We have now essentially completed the process of divesting facilities and product lines that have negatively impacted our earnings,” he notes. The company reported a $59.8 million loss for the first half of 2008, down $42.6 million from losing $102.4 million in the first half of 2007. “Five years ago, we were saddled with a number of unprofitable facilities, heavily dependent upon the health of the U.S. auto market, and equally dependent upon the success of a small number of customers. Today, we are the only company with a cost-effective manufacturing presence in both steel and aluminum wheels in almost every global market,” Bentley explains. “Our strategic focus on improving product, customer and geographic diversification is providing ever-increasing benefits.” Overall, sales in leading-cost countries have almost doubled since 2004, reducing the company’s reliance on the domestic U.S. market. “Our largest single customer today is based in the U.S., but 79 percent of our business with that customer is in other regions,” Bentley says He goes on to point out that the company’s geographic sales distribution has seen significant changes: From 45 percent of total sales in the domestic U.S. market in 2004 to an estimated 13 percent in 2008 (excluding the three facilities being closed or sold); from 4 percent to 16 percent in South America; from 15 percent to 24 percent in Eastern Europe; and from 29 percent to 34 percent in Western Europe. “We have also greatly diversified our customer base since 2004. We are continuing to win new business with European and U.S. customers, and we are increasingly winning with Asian OEMs,” he continues “The company expects to meet or exceed last year’s record of $430 million of new business, with wins spread across its customer base,” he adds. “Although sales are essentially even with five years ago, the company’s employee count is down 33 percent during that period, and employment in high-cost regions is down more than 60 percent, Bentley says, noting that the Hayes Lemmerz product mix is well balanced, with aluminum light vehicle wheels, steel light vehicle wheels and commercial truck wheels each accounting for about a third of the company’s sales. For more information, visit www.hayes-lemmerz.com. |