CAMBRIDGE, ON, Feb. 4 /CNW/ - ATS Automation Tooling Systems Inc. today announced it is closing a small manufacturing facility in McAllen, Texas as part of an ongoing program to enhance the performance of its Precision Components Group ("PCG"). The plant closing will strengthen the economics of the Group's continuing operations by eliminating overhead costs in McAllen and improving the capacity utilization of the remaining PCG operations. The transfer of existing programs from the McAllen facility into existing PCG facilities in the Cambridge area is scheduled to be completed by June 2005.
Management currently estimates that the cash costs associated with moving the business will be approximately $1 million. Non-cash charges may also be incurred by the Group depending on the amount of value realized on disposition of certain assets in McAllen, including the factory, which is owned by ATS, and other assets that may not be transferred." We have determined this facility in McAllen is no longer strategically important and closing it is a necessary step that reflects the realities of today's automotive marketplace and our commitment to dramatically improve Precision Components Group performance," said Klaus Woerner, ATS President and Chief Executive Officer.
"By assimilating its production into our existing Precision Components operations, we expect to reduce overall PCG operating costs near term, and achieve better capacity utilization and improved economies of scale for the Group going forward while maintaining the level of service and quality that our customers expect of ATS." The benefits from this strategic initiative will complement the Company's ongoing programs and initiatives aimed at significantly reducing costs and improving profitability across all PCG operations. These initiatives include increased global sourcing and procurement, efficiency improvement programs, improved utilization of existing productive capacity, rationalization and pricing strategies.
Corporate Description
ATS Automation Tooling Systems Inc. ( www.atsautomation.com ) is the industry's leading designer and producer of turn-key automated manufacturing and test systems, which are used primarily by multinational corporations operating in a variety of industries including: automotive, computer/electronics, healthcare, and consumer products. The Company also makes precision components and sub-assemblies using its own custom-built manufacturing systems, process knowledge and automation technology.
ATS is also an emerging leader in the rapidly growing market for solar energy cells and modules. ATS employs approximately 4,000 people at 26 facilities in Canada, the United States, Europe and Asia-Pacific. The Company's shares are traded on The Toronto Stock Exchange under the symbol ATA. Certain forward looking statements are made in this news release, including statements regarding growth prospects for the business and the impact of changes in management. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including, without limitation, continued acceptance of ATS's products, technologies, customer requirements and other risks detailed from time to time in ATS's periodic reports filed with Canadian regulatory authorities.
