Wheelmaker Reports Production Capability is Restored

Accuride also expands preventative maintenance

July 5, 2006 -- Accuride Corp. has returned to its full production level following equipment breakdowns at one of its automotive wheelmaking operations. Based in Evansville, IN, Accuride manufactures and supplies commercial vehicle components under brand names that include Accuride, Gunite, Imperial, Bostrom, Fabco, and Brillion. Among its products are commercial vehicle wheels, wheel-end components and assemblies, truck body and chassis parts, and seating assemblies, among others.

Terry Keating, CEO, explained that early in the second quarter of this year Accuride lost production capability on one of the forging presses at its Erie, PA, plant. “While assessment and repair of the equipment was taking place, another of our presses malfunctioned,” he revealed. “Unfortunately, neither repair was a quick fix. As a result of these unexpected events, approximately two-thirds of our aluminum forging equipment was rendered temporarily inoperable."

Keating stated that all Accuride machinery is maintained to ensure a high level of reliability, but that following the recent outages the company has expanded its preventative maintenance procedures “above and beyond levels previously in place."

Accuride said total costs of the repairs and press downtime, including the gross margin on lost sales of aluminum wheels, could exceed $6.5 million, before income taxes. Insurance coverage is expected to offset an undetermined part of this cost.

Accuride also reported continuing pressures due to raw material costs. "From January through May of this year, the cost of aluminum has risen approximately 40%," explained Keating. "We have cost recovery actions in place with our customers; however, the lag impact of aluminum price adjustment indices we currently have with major accounts will hinder our ability to achieve full recovery in 2006.” However, he maintained that the company’s operations remain financially stable and cash-flow remains strong, and the company recently paid down an additional $30 million of term debt.

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