Ceradyne, Inc. announced today that, in accordance with the French legal process, its ESK Ceramics France subsidiary is presenting to the local employees’ representatives a plan for closing its manufacturing plant in Bazet, France, effective later this year. As a result, it is anticipated that ESK France will reduce its workforce by approximately 95 employees, primarily composed of manufacturing, production and additional support staff at the plant. This action is being implemented as a cost-cutting measure to eliminate losses that were incurred at this facility due to the recent severe economic contraction and is consistent with Ceradyne’s ongoing objective to lower the costs of its manufacturing operations.
The 88,000-square-foot manufacturing facility is owned by ESK France and has been used to support the production of various industrial ceramic products. Production of these products will be transferred to its German subsidiary, ESK Ceramics GmbH & Co. KG in Kempten, Germany.
Affected employees will be eligible for a severance package that includes severance pay, continuation of benefits and outplacement services. Pre-tax charges relating to this corporate restructuring will also include various other costs to close the plant. The total pre-tax charges are estimated to be in the range of approximately $11 to $13 million, including non-cash pre-tax charges of approximately $2.2 million relating primarily to assets that will be written off or disposed of in connection with the closure of the facility. The majority of these pre-tax charges will be accrued during the second quarter of 2009. Although discussed in the April 28, 2009, teleconference, these non-recurring pre-tax charges were not included in the updated earnings guidance provided during that teleconference.
“The contributions made by all members of the team at Bazet are sincerely appreciated,” said Joel P. Moskowitz, Ceradyne president and chief executive officer. “This strategic decision was difficult but necessary to ensure that ESK Ceramics in Germany focuses its resources and invests appropriately in the production and marketing of products that represent significant value to its customers.
“Our entire ESK Ceramics management team, as well as the rest of the Ceradyne organization, is focused on the challenges of the global economic downturn. Our plan is to continue to 'right-size' our company without compromising our dedication to manufacturing high-quality products at the lowest possible costs and emerge from this recession as a more efficient company.”
The company’s website is located at www.ceradyne.com