LAKE FOREST, Ill.—Ride control and emissions systems supplier Tenneco Inc. said it will close plants in Ontario and Hartwell, Ga., as it restructures its North American ride control operations.
The supplier expects to begin transferring work to its ride control facility in Kettering, Ohio, this year, the company said in a statement on Friday. Complete closure of the two plants is expected near the end of the second quarter of 2020.
A Tenneco spokesman said the closures were not prompted by any loss of auto maker contracts.
About 1,000 jobs are affected by the closures. The spokesman confirmed each plant consists of about 500 employees and are roughly the same size.
Tenneco finalized its acquisition of longtime rival supplier Federal-Mogul Inc. on Oct. 1. It plans to release the value of the deal within the next several weeks, the spokesman said.
Shareholders approved proposals needed for the company's multibillion dollar acquisition of Federal-Mogul from billionaire investor Carl Icahn, the company said in September.
The acquisition will expand Tenneco's product portfolio and accelerate a split into two publicly traded companies— an aftermarket and ride performance unit and a powertrain company. The spin-off is expected to be completed in late 2019, Tenneco said in October.
Tenneco said it expects the deal to tack on $1.9 billion in additional revenue in the fourth quarter and push up full-year revenue to about $11.8 billion.
The firm disclosed more details regarding the transaction during its third quarter financial call on Oct. 26. Through the remainder of 2018, Tenneco/Federal-Mogul will operate under its existing segment structure. The legacy Tenneco business units—Clean Air, Ride Performance and Aftermarket—and its legacy Federal-Mogul business units—Powertrain and Motorparts.
The "New Tenneco" will consist of the Clear Air and Powertrain units while the yet to be named spinoff company will consist of the Aftermarket business and a newly formed "Original Equipment" unit.
Tenneco said that Brian Kesseler will serve as chairman and CEO of the unnamed aftermarket and ride performance spinoff company while Roger Wood will be the chairman and CEO of Tenneco—which will focus on powertrain technologies. The firm said the company should be named by early 2019 and the separation into two publicly traded companies is projected to be complete in late 2019.
During the call, the supplier said its adjusted net income for the third quarter remained mostly flat at $88 million. On a per-share basis, adjusted net income improved by 13 cents to $1.70.
The Lake Forest supplier's unadjusted third-quarter net income fell 28 percent to $60 million, compared with the third quarter of 2017.
Revenue for the quarter grew 4 percent to $2.37 billion, driven by increases in both its clean-air and ride performance units, and a 23 percent surge in commercial truck and off-highway revenue.
The clean-air division's revenue grew 6 percent to $1.6 billion, while its ride performance arm's total revenue rose 5 percent.
The supplier ranks No. 32 on the Automotive News list of the top 100 global suppliers, with worldwide sales to auto makers of $8.02 billion in 2017. Federal-Mogul generated $5.65 billion in revenue from auto makers last year.
Rubber & Plastics News contributed to this report.