The consolidation comes as a result of Clopay’s aggressive campaign to improve manufacturing efficiencies and bring new technologies to market to better serve its customers. Clopay currently operates four manufacturing facilities in Troy, Ohio, Russia, Ohio, Baldwin, Wisconsin and Auburn, Washington.
All of the operations conducted in the Baldwin plant and substantially all of the operations conducted in the Russia facility will be relocated to Troy, Ohio, and the Baldwin facility will be closed.
All active employees at the Russia facility are being offered employment at the Troy facility.
The Company estimates that it will incur pre-tax exit and restructuring costs of approximately $12 million, substantially all of which will be cash charges, including approximately $2 million for one-time termination benefits and other personnel-related costs, approximately $1 million for excess facilities and related costs, and approximately $9 million in other exit costs primarily in connection with production realignment.
In addition, the Company expects to make an investment in capital expenditures of approximately $11 million in order to effectuate the restructuring plan.
The costs and expenditures will be recognized as incurred over the approximately two years that it estimates the consolidation will take.
“These actions will enable us to centralize production at our most technologically advanced facility so that Clopay can improve its manufacturing efficiency while improving our ability to serve the needs of our customers,” stated Steve Lynch, President of Clopay. “Clopay has a legacy of strong performance and exceptional potential for growth.
By consolidating our manufacturing, we will streamline operations, lower costs and maintain the flexibility to meet supply demands now and in the future.”
Clopay purchased the Troy plant in 2006 to allow for new product lines and expansion. Against the backdrop of difficult economic conditions, Clopay successfully launched state-of-the-art polyurethane insulated door products lines in 2008 for both commercial and residential lines.
Clopay also saw increased revenue in its residential Portfolio™ line of designer garage doors, to which it is continuing to add new collections.
This year, Clopay is following up with the launch of several new eco-friendly garage door designs and materials that are unique in the marketplace.
Clopay is also expanding its product offering to include fiberglass entry doors.
Clopay entered the garage door business in 1964 with the purchase of Baker-Aldor-Jones of Hialeah, Florida and the purchase in 1969 of Francis Products in Russia, Ohio.
Clopay owns and operates a national network of 48 distribution centers and sells its products to 2,000 independent professional dealers as well as major home center retail chains.