Héroux-Devtek announces initiatives to optimize and consolidate manufacturing capacity
LONGUEUIL, QC, Jan. 16, 2014 /CNW Telbec/ - Héroux-Devtek Inc. (TSX: HRX), ("Héroux-Devtek" or the "Corporation"), a leading Canadian manufacturer of aerospace products, today announces initiatives to optimize and consolidate manufacturing capacity, while further enhancing productivity throughout the organization. These initiatives are in keeping with Héroux-Devtek's operating strategy of focusing on specialized centres of excellence.
Given the substantial demand reduction for military aftermarket products in the United States, the Corporation will proceed with the permanent layoffs of approximately 55 employees at its manufacturing plant located at 710 Thurber Street, in Longueuil. The layoffs should begin in April 2014 and are expected to take place over a 12-month period, after which approximately 15 workers will remain on site. Héroux-Devtek will continue to carry out such operations at its other centres of excellence in manufacturing.
These measures will result in a charge of approximately $5 million before income taxes to be spread over the fourth quarter of the fiscal year ended March 31, 2014 and the first half of the 2015 fiscal year.
Going forward, Héroux-Devtek's Longueuil operations will focus on its main plant, located at 755 Thurber Street, which will have a combined workforce of approximately 360 employees. This facility is the Corporation's centre of excellence in repair and overhaul, surface treatment and assembly of medium- to large-size landing gear systems. Since the 2007 fiscal year, investments of approximately $40 million have been made at this facility, mainly to modernize the plating department and acquire state-of-the-art assembly equipment.
"The transformations affecting our industry require great flexibility and rapid adaptability, and Héroux-Devtek must be proactive to remain competitive. We regret the impact for the affected employees and their families, but the steep decline in U.S.-based customer demand for military aftermarket products called for adjustments in our manufacturing base. Héroux-Devtek is committed to invest in its centres of excellence and to deploy capital in initiatives that provide customers with value-added products and services. Success will be measured by our ability to further step up our presence in the global supply chain, as proven by the long-term agreement with Boeing to supply complete landing gear systems for the 777 program," said Gilles Labbé, President and Chief Executive Officer of Héroux-Devtek.
Héroux-Devtek Inc. (TSX: HRX) is a Canadian company specializing in the design, development, manufacture and repair and overhaul of landing gear systems and components for the Aerospace market. The Corporation is the third largest landing gear company worldwide, supplying both the commercial and military sectors of the Aerospace market with new landing gear systems and components, as well as aftermarket products and services. The Corporation also manufactures electronic enclosures, heat exchangers and cabinets for suppliers of airborne radar, electro-optic systems and aircraft controls through its Magtron operations. Approximately 70% of the Corporation's sales are outside Canada, mainly in the United States. The Corporation's head office is located in Longueuil, Québec with facilities in the Greater Montreal area (Longueuil, Laval and St-Hubert); Kitchener and Toronto, Ontario; as well as Springfield and Cleveland, Ohio.
Except for historical information provided herein, this press release may contain information and statements of a forward-looking nature concerning the future performance of the Corporation. These statements are based on suppositions and uncertainties as well as on management's best possible evaluation of future events. Such factors may include, without excluding other considerations, fluctuations in quarterly results, evolution in customer demand for the Corporation's products and services, the impact of price pressures exerted by competitors, and general market trends or economic changes. As a result, readers are advised that actual results may differ from expected results.
SOURCE Héroux-Devtek Inc.For further information:
President and Chief Executive Officer
Tel.: (450) 679-3330
Martin Goulet, CFA
Tel.: (514) 731-0000