omniture

Asahi Tec Announces Actions to Reduce Costs, Take Advantage of Global Markets and Enhance Metaldyne’s Integration

2007-03-27 16:12 3898

PLYMOUTH, Mich., March 27 /Xinhua-PRNewswire/ -- Asahi Tec Corp. today announced a number of initiatives to expedite the integration of its Metaldyne subsidiary, consolidate the corporate management structure and reduce operating costs. The company expects these actions, along with the recent announcement of plant closings and executive retirements, to result in a net savings of more than $10 million in fiscal 2007.

The company will continue to focus on balancing assets with the changing global market opportunities and the company’s expanding Asian businesses. This consolidation of corporate functions comes just 10 weeks after the merger was completed in early January. Asahi Tec also completed a successful equity issuance in early March whereby new investors from Southeast Asia and Europe contributed more than $70 million of new equity. This equity round was the second part of a planned three-phase restructuring of the Asahi Tec/Metaldyne capital structure which included the initial merger transaction, the equity issuance and a contemplated debt refinancing of the combined companies.

"Metaldyne and Asahi Tec came together to create a new, better capitalized global company that delivers leading edge products and processes to our customers, shareholder value to our investors and opportunity to our employees," said Tim Leuliette, Asahi Tec co-chairman and co-CEO. "These actions will not only reduce our costs, they will result in more efficient operations and expanded capabilities that will allow us to take advantage of the opportunities offered in this highly competitive global market."

Among these actions are: a new global organizational structure, rationalizing some facilities, eliminating redundancies and a plan to not replace more than 25 executives who will retire this fiscal year. These moves were approved by the Asahi Tec board of directors.

Under the new organizational structure the Finance, Corporate Development, Legal, Human Resources, Information Technology, Quality and Manufacturing Process and Corporate Communications functions will be handled globally.

"This new global organizational structure capitalizes on talent within our organization and ensures collaboration and consistent decision making at the top levels of Asahi Tec," said Shoichiro Irimajiri, Asahi Tec co-chairman and co-CEO. "It will improve our performance and help us respond more rapidly to the constantly changing global business environment."

As announced in a separate release, Takao Yoshida, currently CFO of Asahi Tec, will become executive vice president and CFO of the combined companies and report to Leuliette and Irimajiri. The following Finance executives will assume global responsibility and report to Yoshida: Terry Iwasaki, vice president and corporate controller; Sandi Galac, vice president and treasurer; Hirohisa Yamada, vice president, Financial Planning, and Brian Krass, director, Internal Audit. Yves Gerard, European Finance director, also will report to Yoshida. An Investor Relations executive also will be added to Yoshida’s global staff and will reside in Japan.

Metaldyne’s current CFO Jeff Stafeil, will continue as an executive vice president of the Metaldyne subsidiary and special advisor to Leuliette and Irimajiri. In addition, he will assume a senior role at RHJ International (RHJI). RHJI is Asahi Tec’s controlling shareholder with 37 percent ownership of the total outstanding shares.

"One of Jeff’s key accomplishments was building a strong financial team," said Leuliette. "We are looking at refinancing opportunities to better align our capitalization to our global business and reduce our annual interest burden. This team will start the process of recapitalizing our debt structure."

In addition, the following executives will assume global responsibility and report to Leuliette and Irimajiri:

-- Thomas Amato, executive vice president, Corporate Development,

and chief integration officer for Asahi Tec. In addition to

leading global mergers and acquisitions activities for Asahi

Tec and all of its subsidiaries, he will be responsible for

driving the integration of Asahi Tec and Metaldyne.

-- Logan Robinson, executive vice president and general counsel,

government relations and secretary

-- Marjorie Sorge, vice president, Corporate Communications

Tom Chambers, Metaldyne Powertrain & Chassis Group president and COO, also reports to the co-chairmen and co-CEOs. Chambers oversees the day-to-day operations at Metaldyne’s 38 global facilities. Metaldyne recently restructured its North American Powertrain and Chassis operations to better align the cost structure with market opportunities and to meet the challenges of the evolving North American market. The restructuring also will enhance Metaldyne’s global reach and competitiveness.

Under this new structure the Metaldyne North American Chassis Group will be combined into one business unit headed by Al Malizia, vice president and general manager, Metaldyne North American Chassis Group, who reports to Chambers. This action resulted in the retirement or departure of several executives.

The Metaldyne European Chassis Group structure remains the same and reports to Denis Bardou, vice president and general manager.

Irimajiri also will assume the role of acting president and COO of the Asahi Tec Metal Forming Group and the Asahi Tec Diversified Product Group following the retirement of Akira Nakamura, current president and CEO of Asahi Tec.

Separately, Metaldyne also has taken actions to adjust the excess capacity in its plants caused by production cuts from its North American customers. The company recently said it will close its Greenville, NC, plant and transfer operations to its Greensboro, NC, plant, which has enough open floor space to absorb the Greenville work. Greenville, which manufactures chassis and suspension products, will close by December.

"We believe the future of Asahi Tec is unlimited and that these actions further expand our opportunities to grow globally," said Irimajiri. "We are now structured to be a more agile and efficient company that delivers the right products to our customers at the right time with the highest quality."

About Asahi Tec

Headquartered in Shizuoka, Japan, Asahi Tec (TSE: 5606) primarily designs, manufactures and sells ductile iron cast auto parts for truck and construction machinery OEMs, aluminum casting parts for truck and passenger car OEMs and aluminum wheels for automobile OEMs. Asahi Tec also designs, manufactures and sells environmental systems, equipment and development technologies used by local governments and municipalities and electrical hardware and equipment used by electricity generators.

Its subsidiary, Metaldyne, is a leading global designer and supplier of metal-based components, assemblies and modules for transportation related powertrain and chassis applications including engine, transmission/transfer case, wheel-end and suspension, axle and driveline, and noise and vibration control products to the motor vehicle industry. It is headquartered in Plymouth, Mich.

Asahi Tec has annual revenues of approximately $2.7 billion and employs approximately 10,000 employees at 55 facilities in 15 countries. For more information, please visit http://www.asahitec.co.jp and http://www.metaldyne.com .

Cautionary Information Regarding Forward-Looking Statements

Statements in this press release, which are not historical facts, are "forward-looking" statements, as that term is defined by the federal securities laws. Forward-looking statements include certain anticipated, believed, planned, forecasted, expected, targeted and estimated results along with Metaldyne’s outlook concerning future results, based on information available at the time of this press release. All forward-looking statements are inherently uncertain as they are based upon various expectations and assumptions concerning future events, and they are subject to numerous known and unknown risks and uncertainties which could cause actual events or results to differ materially from those expressed or implied by the forward-looking statements. We caution readers not to place undue reliance on the forward-looking statements, and any such forward-looking statements are qualified in their entirety by reference to the following cautionary statements.

Important factors upon which the forward-looking statements presented in this press release are premised include: (a) timely implementation and execution of merger related plans including integration plans; (b) retention of customers and critical employees; and (c) successful management of any impact from declines in North American automobile and light truck builds. In addition, the ability of Metaldyne to achieve the expected results with Asahi Tec also will be affected by the effects of competition (in particular the response to the merger in the marketplace), the effects of general economic and other factors beyond the control of Metaldyne, and other risks and uncertainties that have been described from time to time in Metaldyne’s public filings with the Securities and Exchange Commission, as further identified below.

Risks and uncertainties that could cause actual results to vary materially from those anticipated in the forward-looking statements included in this press release include general economic conditions in the markets in which we operate and industry-based factors such as: declines in North American automobile and light truck builds, reductions in outsourcing by our automotive customers, increases in our raw material and energy costs, labor costs and strikes at our major direct and indirect customers and at our facilities, dependence on significant automotive customers, the level of competition in the automotive supply industry and pricing pressures from our customers, technological developments that could competitively disadvantage us, and risks associated with conducting business in foreign countries. In addition, factors more specific to us could cause actual results to vary materially from those anticipated in the forward-looking statements included in this report such as substantial leverage, limitations imposed by our debt instruments, the adequacy of our liquidity to meet our capital expenditures and other cash requirements, our ability to identify attractive and other strategic opportunities and to successfully achieve the intended benefits of the merger with Asahi Tec and integrate acquired businesses including actions we have identified as providing cost-saving opportunities.

We do not undertake any obligation to review or confirm analysts’ expectations or estimates or to publicly update or revise any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, or changes to future results over time.

Source: Asahi Tec Corp.
Keywords: Transportation
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