LAKE CITY, Minn. (KTTC) -- With 45,000 employees in 34 countries and a global footprint, Michigan-based automotive parts manufacturer Federal-Mogul reported it lost $117 million in 2012, and promised more restructuring to slash costs.
Federal-Mogul has two plants in Lake City, and weeks ago announced a decision to shift 100 jobs from its piston production line to plants in Puebla, Mexico and Buenos Aires, Argentina. As the company reported Fourth Quarter and Full Year 2012 financial results on Wednesday, there's absolutely no reassurance that this is the last such move.
"The company today announced plans to commence an additional multi-site restructuring program involving the potential closure or downsizing of manufacturing facilities, primarily in Western Europe," according to its own statement. "The plan will be implemented from 2013 through 2015 and involves shifting capacity and equipment to existing lower cost sites in Eastern Europe, Asia and Mexico."
Federal-Mogul blames softer European market conditions for much of its troubles, but believes things will turn around in 2013.
"Our European customers have signaled a market recovery in the second half of 2013," said Rainer Jueckstock, co-CEO and Powertrain Segment CEO, in a company statement. Later, in a conference call with reporters, he noted "The company was hard hit by declining vehicle production in Europe, which started in the second half of 2012."
Federal-Mogul is indicating that it has been focused on shifting away from unprofitable business lines, and its shifting of jobs from Lake City to south of the border falls neatly into a pattern of cost-cutting within its business units. Jueckstock emphasized the complexity of the company's far-flung manufacturing empire, noting that it is now operating 110 manufacturing sites, 15 distribution centers and 24 technology centers "where we perform research development and application engineering."
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