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Aluminum-wheel maker closing Rogers plant

Superior Industries to cut 500 jobs, shift work to Fayetteville, Mexico factories

Posted: July 31, 2014 at 5:28 a.m.

Superior Industries International Inc., said Wednesday that it would close its aluminum-wheel plant in Rogers by the end of the year, a move that will result in the loss of 500 jobs.

Superior Industries International Inc., the nation's largest maker of aluminum wheels for cars and light trucks, said Wednesday that it's closing its Rogers plant, cutting about 500 jobs, to cut costs.

The Van Nuys, Calif.-based company plans to close the plant late in the year. Superior Industries will move some of the production to its Fayetteville plant and to Mexico, where it has a cluster of plants. The company said the move will save $15 million in labor costs.

Superior Industries' Fayetteville plant employs more than 700. In May, Superior Industries said it cut 150 positions between its Rogers and Fayetteville plants, mostly through attrition and eliminating some temporary workers. It opened the Rogers plant in 1981 and the Fayetteville plant in 1986.

Donald Stebbins, 56, a longtime auto industry executive, took over as president and CEO of Superior Industries in May. He replaced Steven Borick, who retired at the end of March. Borick had led the company since 2005, after taking over for his father, the late Louis Borick, the company founder.

"This action follows a comprehensive review of the company's cost position in what continues to be an intensely competitive environment," Stebbins said in a release.

"Our board and management team remain focused on building an efficient, operationally stronger organization that can compete effectively with manufacturers around the globe. We appreciate the contribution of our team members at Rogers and will be providing assistance to them during the transition process."

Shares of Superior Industries dropped slightly Wednesday, closing at $20.15, down 6 cents, or less than 1 percent, in trading on the New York Stock Exchange. Shares have traded between $16.89 and $21.77 over the past year.

The Fayetteville-Springdale-Rogers Metropolitan Statistical Area -- which includes Benton, Washington and Madison counties and McDonald County in Missouri -- had a preliminary unemployment rate of 4.9 in June, down from 6.1 percent for June 2013. The rate is the lowest among Arkansas' statistical areas for the month. The state's average unemployment rate was 6.5 percent for June.

Despite the low unemployment numbers in the region, the loss of the 500 jobs at Superior Industries will be a significant hit to the local economy, said Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas at Fayetteville.

"They are good-paying jobs, and it's a big number," Deck said.

Roger Pondel, a company spokesman, declined to give a pay range for the terminated employees.

According to the Bureau of Labor Statistics, the average manufacturing worker in Benton County took home $40,388 annually in 2013. Deck noted that besides the salaries, such jobs also tend to come with benefits, making them even more desirable.

Pondel said the employees at the Rogers plant would be given severance packages based on their job responsibilities and seniority. He said job training and transition services are being coordinated with the Arkansas Department of Workforce Development.

Deck said the area has seen its job growth slow in recent months and called the plant closure an additional head wind for the area's economy. She said the decision by Superior Industries highlights the importance of continuing efforts to retain key employers.

Mike Harvey, chief operations officer of the Northwest Arkansas Council, a nonprofit organization that promotes the region, said that in the coming weeks he hopes the organization can assist the workers.

Harvey said surveys from area manufacturers show a need for skilled workers, from welders to machinists, and he hoped many of the displaced Superior Industries workers will be able to transition into new jobs quickly.

Superior Industries expects severance costs of up to $2.5 million connected with the plant's closure. At the end of June, the value of the Rogers plant's assets and manufacturing equipment was placed at $22 million. Charges tied to the plant's closure are expected to be booked in the third and fourth quarters of this year.

The Rogers and Fayetteville plants are Superior Industries' only U.S. manufacturing operations. It has three plants in Chihuahua, Mexico, and is building a fourth. The new plant is expected to cost $125 million to $135 million to build, will have the capacity to produce up to 2.5 million wheels a year and is expected to be operational by early 2015.

The company reported total revenue of $789.6 million in 2013, down 4 percent from $821.5 million in 2012. Unit shipments were down 5 percent for 2013 compared with the year-ago period. At the time, the company reported that its U.S. plants were seeing lower operating costs and productivity improvements.

Superior Industries was founded in 1957 and first made bug screens for radiators. Today, its biggest customer is Ford, which makes up 45 percent of the wheel-maker's net sales. Other major customers include GM, Toyota and Chrysler. Combined, the four companies account for 91 percent of Superior Industries' total wheel sales in 2013.

According to its 2013 annual report, the company has 3,700 full-time employees compared with 3,900 in 2012. None of Superior Industries' employees are covered by a collective bargaining agreement.

Raymond Burns, president and CEO of the Rogers-Lowell Area Chamber of Commerce, said Superior Industries was the first major industry he signed when he started at the chamber 25 years ago. He said that while news of the job cuts is hard to take, at least Superior Industries left its Fayetteville operation untouched.

He said he anticipated working closely with the state to help the displaced workers connect with area businesses that need workers or seek job training.

"That's our main focus now," Burns said.

A Section on 07/31/2014

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