Novi, Michigan – Cooper Standard Automotive Inc. will shutter two more facilities in addition to the 10 closures announced last year as the auto supplier moves ahead with restructuring its global operations.
The two plants will close in 2020 at a cost of $15 million (€13.8 million), compared to 2019 restructuring expenses of $20 million to shut down or mothball six plants in Asia, three in North America and one in Europe.
"Two more significant manufacturing factories have been identified for closure," Jeff Edwards, Cooper Standard chairman and CEO, said in a 25 Feb quarterly conference call.
The company official did not identify the locations of the two plants or say how many jobs will be lost.
Edwards said this year's closures are partly customer driven and partly a continuation of corporate streamlining.
"We don't need as much space," Edwards said, adding the cost savings from the two pending closures represents a two-year payback of the $15 million restructuring expense.
Cooper Standard produces rubber and plastic sealing, fuel and brake delivery systems, and fluid transfer systems for auto makers, including Ford, General Motors, Mercedes-Benz and Renault Nissan, at a volatile time for the market.
The company lost $22.3 million in the fourth quarter of 2019 and ended up $3.3 million in the red for the year on sales of $3.1 billion. That compares to a $158 million profit in 2018 on sales of $3.6 billion.
The company has linked the declines to the divestiture of its anti-vibration systems business, unfavourable volume and mix, customer price adjustments, and the impact of the United Auto Workers work stoppage in the US.
General inflation, higher raw material costs and unfavourable foreign exchanges also hurt the bottom line.
The protracted UAW union strike and the write-off of a discontinued customer relationship in China last year had a combined $22 million one-time negative impact on results for 2019, Edwards said.
As headwinds continues, the company has offered sales guidance for 2020 at $2.85 billion to $3.05 billion
"We believe the challenging market conditions that have persisted for the last 18 to 24 months are the new normal for the auto industry," Edwards said.
In addition to the facility closures, the company is in the midst of a strategic review process to consider alternatives for other unprofitable operations. Edwards said details will be provided as decisions are finalised.
About $81 million in operating efficiencies were achieved in 2019 while the company executed a record 271 new programme launches, which is an increase of 38% over 2018.