U.S. Markets close in 3 hrs 14 mins

Barnes Group to close operations at Associated Spring facility in Michigan

Barnes Group announced the planned closure of production operations at its Associated Spring facility located in Saline, Michigan. The Saline production operations, which include approximately 50 employees, primarily manufacture certain automotive engine valve springs, a highly commoditized product. Based on changing market dynamics and increased customer demands for commodity pricing, several customers advised the company of their intent to transition these specific springs to other suppliers, which led to the decision to close production operations in Saline. The closure is expected to be completed mid-year 2014. The 2014 pretax charges associated with the closure of the production operations are estimated to be approximately $8M, with about half of this amount expected to be recorded in the first quarter. Of this total amount, approximately $3M relates to employee termination costs, primarily severance and pension costs. The balance relates to other costs associated with the closure of the production operations. Approximately $6M of the $8M in pretax charges is expected to result in future cash expenditures. These charges are not included in the company’s 2014 full-year outlook provided on February 21, which was current only as of the date provided. The company plans to update its 2014 full-year outlook during the next quarterly earnings call, which is anticipated to take place in late April.