Tower Automotive Business Report FY2006
|(in million $)||FY2006||FY2005||Rate of change (%)||Factors|
|Sales||2,539.4||2,932.2||(13.4)||The decrease is primarily due to lower volume, the impact of two frame programs ending and unfavorable product mix, which decreased revenue by $411.9 million during the 2006 period compared to the 2005 period. In addition, steel price recoveries from certain customers decreased by $17.7 million during the 2006 period compared to the 2005 period. These impacts were partially offset by favorable foreign exchange, which increased revenue by $46.2 million during the 2006 period compared to the 2005 period.|
Reorganization under Chapter 11
-In February 2005, the Company filed for bankruptcy protection from creditors. It expected its restructuring to take up to 18 months. The filing would address its liquidity needs and facilitate debt restructuring. It had no plans at this point for large scale job cuts. The Chapter 11 filing also covered about two dozen affiliates. Since international operations in Europe, Asia, Brazil and Canada were profitable, these operations were not included in the reorganization.
Initiatives implemented by the Company
during 2006 include:
-In February 2006, the Company announced that it would begin discussions with the union to close its Greenville, MI facility and to move the work to other facilities in the U.S. The Company closed this facility in November 2006.
-In May 2006, the Company announced its intention to enter into decision bargaining with the union to downsize its Bluffton, OH facility and move work to other facilities in the U.S.
-In June, 2006, the Company announced that it would phase out production at its Toronto, Ontario aluminum foundry and mini-mill on August 31, 2006.
-In September 2006, the Company announced that production from its Upper Sandusky, Ohio plant would be consolidated into other Tower facilities in North America.
-In November 2006, the Company announced that production from its Kendallville, Indiana plant would be consolidated into other Tower facilities in North America.
-In December 2006, the Company and Tower Automotive Lansing, LLC completed the sale of the Lansing, Michigan facility and related assets to a designee of General Motors in accordance with the Order of the Bankruptcy Court dated August 10, 2005.
-The following table presents an overview of the major models for which the Company supplies products:
|Ford||Five Hundred/ Freestyle/ Montego||Complex Assembly|
|Nissan||Frontier/ Xterra/ Pathfinder||Frame Assembly & Body Structures|
|Titan/ Armada/ Qs56||Frame Assembly|
|Volvo||S40/ V50/ C30||Complex Assembly|
|VW||Cayenne/ Touareg/ Porsche||Body Structures & Assembly|
|BMW||1/3 Series||Body structures|
|Sorento||Body Structures & Frame Assembly|
|( in millions of dollar )||FY2006||FY2005||FY2004|