12 Jul 2004
By Liz White, ERJ staff
Sacramento, California-GenCorp Inc. is in talks about selling its GDX Automotive business, which makes extruded weatherstrip for major car makers worldwide.
The group deferred its second quarter earnings release to 15 July from 12 July as the announcement about the GDX negotiations went public 12 July.
GenCorp also announced that it has decided to classify the loss-making GDX Automotive unit as a discontinued operation as of the second quarter of 2004, taking a one-time pre-tax charge of between $250 and $300 million for the estimated disposal value.
GenCorp has placed the blame for GDX's problems largely on its European plants, specifically in France and Germany.
The group has been trying to close the Snappon plant at Chartres, France, but has been hindered in its efforts by the workers' council. This plant produced almost all the losses GDX experienced in the first quarter, according to Terry Hall, GenCorp chairman.
Low orders from Volkswagen for the high-cost GDX plant at Grefrath, Germany have caused GDX to look at moving platforms and production from Grefrath to lower-cost units in central Europe or Spain, Hall said, at the group's first quarter results meeting.
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