Major makeover
New Albany-based Commercial Vehicle Group names new leader, announces layoffs and plant closings
Commercial Vehicle Group Inc. has made a switch at the top and also is announcing cost cuts of up to $12 million that will include layoffs and plant closings before the end of the year. Specifics about the number and locations of the cuts were not immediately available. The company will provide more information in a conference call with analysts this morning.
The New Albany-based vehicle-parts manufacturer will enter this period of change with a new leader. Patrick Miller has been named president and CEO, replacing Richard Lavin, who resigned effective on Friday.
“I am committed to attacking the challenges facing us, which include improving our competitive cost position while we pursue growth,” Miller said in a statement. “We are fortunate to have capable, committed people throughout
the organization, and I look forward to working with them.”
Miller is being promoted from president of the company’s global truck and bus division and has been with Commercial Vehicle since 2005.
Lavin has been in charge since 2013, coming from outside the company, including experience at Caterpillar Inc. He will be paid $375,000 under a severance agreement, according to a regulatory filing.
“On behalf of the entire organization and the board of directors, I thank Rich for his contributions and wish Pat the best in this new role,” said Dick Snell, Commercial Vehicle’s chairman, in a statement.
Two other top executives have lost their jobs: Brent Walters, senior vice president and general counsel, and Ulf Lindqwister, senior vice president and chief administrative officer. This is part of what a spokeswoman described as a “realignment of our executive office.”
The company plans to spend $12 million to $19 million on the restructuring, which will be used for “employee-related separation costs and other costs associated with the transfer of production and subsequent closure of facilities,” according to a news release.
Commercial Vehicle has about 6,850 employees worldwide, of which 445 are located in Ohio. The Ohio employees include 165 at the New Albany headquarters, with the remainder at plants in Coshocton and Shadyside.
The company’s products include truck seats and mirrors, among many others.
Lavin said in a conference call this month that North American truck production was likely peaking this year, which indicates that demand is set to decrease for some products. He said this forecast had made the company begin a process of “revising and refining our thinking regarding manufacturing capacity utilization and manufacturing footprint.”
The cost-cutting is not a surprise considering that the market is in decline and that similar manufacturers are also making cuts, said Michael Shlisky, senior analyst for Seaport Global Securities, in a research note.
In the most recent quarter, the company posted an increase in profit and a decrease in sales compared with the prior-year quarter, with profit of $2.6 million and sales of $202.7 million.
The company’s stock has dropped by more than 50 percent since June. The closing price on Monday was $3.59 per share, down 4 percent for the day.
“We know the impact of these decisions will be difficult for our employees and the communities affected by closures,” Miller said. “We do not make these decisions lightly.”