Kennametal initiates restructuring; three facilities to close in Germany and USA
July 12, 2019
Kennametal Inc., Pittsburgh, Pennsylvania, USA, has announced several restructuring actions expected to position the company for long-term profitable growth. As part of its ongoing initiative, the company is said to be optimising its operations globally, including footprint rationalisation.
The company plans to close its manufacturing facilities in Essen and Lichtenau, Germany; its distribution centre in Neunkirchen, Germany; and its manufacturing facility in Irwin, Pennsylvania, USA. These restructuring actions are expected to aid the company in securing its fiscal 2021 financial targets, announced at its most recent investor day.
They are also part of the previously announced goal of reducing plants through simplification/modernisation, with additional plants currently under evaluation. The proposed restructuring will be executed over the next two years, and is expected to deliver estimated annualised savings of $35–40 million and $55–65 million in pre-tax charges.
“The proposed measures are difficult but necessary to achieve structural improvements, further improve operational efficiency and continue to drive value for shareholders,” stated Christopher Rossi, Kennametal’s President and Chief Executive Officer. “We recognise the effect on our employees and will work closely with their representatives to support them throughout this transition.”
The company plans to consolidate its Essen and Lichtenau operations, including both Kennametal and WIDIA-branded products, into other lower-cost Kennametal Industrial facilities. The Irwin operations would be consolidated primarily into the newly modernised Infrastructure plant in Rogers, Arizona, USA.