Novi, Mich., September 28, 2008 - Citation Corp. today announced it will immediately implement a corporate restructuring program designed to increase the company's focus on emerging markets and right-size capacity to meet customer demand. As part of its restructuring, Citation has reorganized into two business units - Industrial and Transportation - and will eliminate 18 percent of its corporate salaried workforce.
"The purpose of the reorganization is to align our manufacturing plants with the key markets they serve to drive focus and capitalize on synergies," said Doug Grimm, chief executive officer for Citation. "We continue to see growth prospects in global infrastructure such as rail, wind energy, agriculture and construction where Citation is uniquely positioned with the right mix of manufacturing assets and experienced people."
To meet these restructuring objectives, Citation is also announcing the closure of its Lufkin, Texas, foundry. The closing is in response to decreased automotive industry demand and to meet its long-term financial objectives of remaining competitive in today's market. The plant is scheduled for closure or sale by March 2009. Citation will work closely with customers on a transition plan.
The company began reducing capacity at the facility in August by transferring a select group of products to its Brewton, Ala., foundry, which has similar equipment. This initial consolidation will be complete in October.
"After further assessment and the continued lower production demand, we have made the difficult decision to close our Lufkin facility," said Cary Wood, chief operating officer for Citation. "The closing ensures Citation remains a viable and competitive player in the castings industry and positions us for future growth in the transportation market and other growing sectors of our business."
Citation currently employs 35 salaried and approximately 340 hourly workers at its Lufkin facility. Affected employees will receive job counseling through the local Bureau of Workforce Development and the Department of Commerce and Economic Opportunity.
"Citation will continue to proactively make decisions that support our positive business transformation, which is strengthened by our strong shareholder support, de-levered balance sheet and our diverse customer base," added Grimm.
Citation is a privately held corporation headquartered in Novi, Michigan. Citation employs 2,600 employees in Alabama, Texas, Indiana, Michigan, North Carolina and Wisconsin. The company designs, develops and manufactures high-quality cast, machined and assembled components for the industrial and transportation markets.