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First-quarter-sales plunge prompts Wabtec to close Canadian plant, cut costs


Decreased first-quarter earnings and a weakened rail-supply market are prompting Wabtec Corp. to proceed with plans to close a Burlington, Ontario, brake components plant in the second quarter — eliminating 120 production and support jobs — and reduce its raw-materials and purchased-services costs 2 percent in the second half.
Wabtec April 17 announced plans to shift production from the Burlington plant to other facilities while it evaluates other plant consolidations.
The company during the first quarter already reduced its workforce 3 percent (129 jobs).
Wabtec reported first-quarter earnings per diluted share of 5 cents compared with 24 cents in first-quarter 2001.
Officials believe the lower earnings resulted from an 18 percent sales drop, and an unfavorable product mix and pricing pressures, which more than offset the company's lower interest expenses.
"In this difficult market, we continue to remain focused on generating cash and positioning the company to benefit when the market strengthens," said Wabtec Chairman William Kassling in a prepared statement.
Locomotive deliveries this year could be slightly higher than a predicted 700 units, officials believe, but rail-car deliveries could be slightly lower than an anticipated 20,000 units, based on 2,637 first-quarter orders.
Wabtec's freight group sales decreased 22 percent in the quarter, primarily due to lower sales of rail-car components. The industry's first-quarter car deliveries decreased to 3,855 units — a 65 percent drop compared with first-quarter 2001 and a 45 percent decrease compared with fourth-quarter 2001.
Meanwhile, the transit group's sales dropped 7 percent, primarily due to lower sales of bus doors and air conditioning units for transit-rail vehicles.

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More News from 4/17/2002