Husqvarna last week announced its decision to close its plant in Beatrice, Neb., and transfer production to the plant in Orangeburg, S.C., in an effort to improve efficiency and reduce costs.
The closure and transfer will be implemented in the second half of 2010. The cost for the measures is estimated at approximately SEK 110 million (about U.S. $13.9 million) whereof cash items amount to approximately SEK 70 million (U.S. $8.8 million), which will be charged to income in the second quarter of 2010. Annual savings from the measures are expected to amount to approximately SEK 40 million (U.S. $5.0 million) and will be generated gradually from the start of 2011 with full effect as of 2012.
The Beatrice plant assembles mainly zero-turn radius lawn mowers. The factory in Orangeburg manufactures similar products including riding garden tractors and tillers.
Together with an earlier announcement to close a factory in Greece, operating income in the second quarter of 2010 will be charged with restructuring costs totaling SEK 160 million (U.S. $20.2 million). The total annual savings from the measures are estimated at approximately SEK 60 million (U.S. $7.6 million) and will be generated gradually from the start of 2011 with full effect as of 2012.
The Husqvarna Group produces outdoor power products including chainsaws, trimmers, lawn mowers and garden tractors. The Group is also one of the world leaders in cutting equipment and diamond tools for the construction and stone industries. Net sales in 2009 were SEK 34 billion (U.S. $4.3 billion).
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