UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported): DECEMBER 28, 2001
TOWER AUTOMOTIVE, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation)
1-12733 41-1746238
(Commission File Number) (I.R.S. Employer Identification No.)
5211 CASCADE ROAD SE - SUITE 300, GRAND RAPIDS, MICHIGAN 49546
(Address of Principal Executive Offices) (Zip Code)
(616) 802-1600
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Item 9. Furnished Information
On December 28, 2001, Tower Automotive, Inc. issued the press release
included in this Form 8-K.
As described in the press release, Tower Automotive, Inc. has stated that
it will be taking restructuring and impairment charges totaling $289 million in
the fourth quarter ended December 31, 2001. Of this amount, $277 million relates
to non-cash charges associated with goodwill and other asset impairments. The
Company expects that the cash charges recorded will be recovered with operating
savings by the end of its 2002 fiscal year. The Company previously announced
other fourth quarter charges of $95 million associated with the closure of its
Sebewaing, Michigan, facility. The Company also indicated that it continues to
evaluate the potential discontinuance of all manufacturing processes currently
performed at its Milwaukee Press Operations facility.
The first portion of the restructuring charge relates to consolidation of
technical activities and a reduction of other salaried colleagues pertaining to
a reorganization of the Company's U.S. and Canada operations. The reduction
affects 215 engineering, finance, information technology and human resource
colleagues in the Company's technical and administrative centers in Novi,
Rochester Hills, and Grand Rapids, Michigan; Milwaukee, Wisconsin; and its U.S.
and Canada manufacturing locations. This portion of the restructuring will
result in a charge of $17 million, the cash portion of which is $9.8 million.
The reduction in the salaried colleague workforce should be completed by third
quarter 2002.
The second portion of the restructuring charge will be approximately $69
million, of which only $2.4 million is cash, related to the relocation of some
component manufacturing from the Company's Milwaukee Press Operations to other
Tower locations.
The Company also will record non-cash charges of approximately $203 million
related to the impairment of goodwill and underutilized assets at certain
business locations, and the carrying value of an under-performing investment.
In October 2001, Tower Automotive previously announced the closure of its
Sebewaing, Michigan, facility by March 2002, resulting in approximately $23
million of fourth quarter cash charges and $72 million in non-cash charges.
The combination of the Sebewaing closure and the restructuring and
impairment charges announced today result in total fourth quarter pre-tax
charges of approximately $384 million, the cash portion of which is $35 million
and the non-cash portion of which is $349 million.
The combined fourth quarter non-cash charges include fixed asset impairment
charges of $91 million, goodwill reduction of $196 million, a reduction in the
carrying value of investments of $46 million, and an increase in estimated
long-term employee benefit accruals of $16 million. The Company expects a
reduction of approximately $4.5 million in depreciation expense as a result of
the asset impairment charges being recorded. As the Company intends to adopt
Statement of Financial Accounting Standards No. 142 in the first quarter of
2002, it will cease recording periodic amortization of goodwill at that time.
In addition to the reorganization and realignment actions noted above,
early in December Tower Automotive informed the unions representing its
Milwaukee Press Operations colleagues that the site's management team will
recommend the discontinuance of all stamping and ancillary processes currently
performed at the facility and the relocation of that work to other Tower
Automotive plants or Tier II suppliers. Tower Automotive is presently in
discussions with the leadership of these unions related to this recommendation,
and expects to finalize a decision early in first quarter 2002. Approximately 40
salaried colleagues and 450 hourly colleagues would be affected by a closure of
the Milwaukee Press Operations, with anticipated cash closure costs of $10
million to $20 million and additional impairment charges of $50 million to $60
million. The company intends to continue the assembly of frames for the Dodge
Ram and Ford Ranger trucks at its Milwaukee facilities.
A copy of the press release issued today follows below:
December 28, 2001
FROM: FOR:
Padilla Speer Beardsley Inc. Tower Automotive, Inc.
224 Franklin Avenue West 5211 Cascade Road S.E., Suite 300
Minneapolis, Minnesota 55404 Grand Rapids, Michigan 49546
Anthony Barone (616) 802-1600
Dave Tuit (616) 802-1591
FOR IMMEDIATE RELEASE
---------------------
TOWER AUTOMOTIVE ANNOUNCES RESTRUCTURING AND IMPAIRMENT CHARGES; CONTINUES TO
EVALUATE MILWAUKEE PRESS OPERATIONS
GRAND RAPIDS, MICH., DECEMBER 28 - Tower Automotive, Inc. (NYSE: TWR) announced
today that it will be taking restructuring and impairment charges totaling $289
million in the fourth quarter ending December 31, 2001. Of this amount, $277
million relates to non-cash charges associated with goodwill and other asset
impairments. The company expects that the cash charges recorded will be
recovered with operating savings by the end of its 2002 fiscal year. A Form 8-K
has been filed today reflecting this announcement. The charges being announced
are in addition to those associated with the closure of the company's Sebewaing
facility, which was announced in October 2001.
The first portion of the restructuring charge relates to consolidation of
technical activities and a reduction of other salaried colleagues pertaining to
a reorganization of the company's U.S. and Canada operations. The reduction
affects 215 engineering, finance, information technology and human resource
colleagues in the company's technical and administrative centers in Novi,
Rochester Hills, and Grand Rapids, Mich.; Milwaukee, Wis.; and its U.S. and
Canada manufacturing locations. This portion of the restructuring will result in
a charge of $17 million, the cash portion of which is $9.8 million. The
reduction in the salaried colleague workforce should be completed by third
quarter 2002.
The second portion of the restructuring charge will be approximately $69
million, of which only $2.4 million is cash, related to the relocation of some
component manufacturing from the company's Milwaukee Press Operations to other
Tower locations.
The company also will record non-cash charges of approximately $203 million
related to the impairment of goodwill and underutilized assets at certain
business locations, and the carrying value of an under-performing investment.
In addition to the reorganization and realignment actions noted above,
early in December Tower Automotive informed the unions representing its
Milwaukee Press Operations colleagues that the site's management team will
recommend the discontinuance of all stamping and ancillary processes currently
performed at the facility and the relocation of that work to other Tower
Automotive plants or Tier II suppliers. Tower Automotive is in discussions with
the leadership of these unions related to this recommendation, and expects a
decision early in first quarter 2002. Approximately 40 salaried colleagues and
450 hourly colleagues would be affected by a closure of the Milwaukee Press
Operations, with anticipated cash closure costs of $10 million to $20 million
and additional impairment charges of $50 million to $60 million. The company
intends to continue the assembly of frames for the Dodge Ram and Ford Ranger
trucks at its Milwaukee facilities.
Tower Automotive, Inc., produces a broad range of assemblies and modules
for vehicle structures and suspension systems for the automotive manufacturers,
including Ford, DaimlerChrysler, GM, Honda, Toyota, Nissan, Fiat, Kia, Hyundai,
BMW and Volkswagen. Products include body
structural assemblies such as pillars and package trays, control arms,
suspension links, engine cradles and full frame assemblies. The company is based
in Grand Rapids, Mich.
This news release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Actual results may differ
materially from the anticipated results as a consequence of certain risks and
uncertainties, including but not limited to general economic conditions in the
markets in which Tower Automotive operates and other risks detailed from time to
time in the company's Securities and Exchange Commission filings.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
TOWER AUTOMOTIVE, INC.
Date: December 28, 2001 By: /s/ Anthony A. Barone
-----------------------------------------------
Name: Anthony A. Barone
Title: Vice President and Chief Financial Officer
(Principal Accounting and Financial Officer)