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