NORTHVILLE, Mich.—Cooper Standard Holdings Inc.’s reorganization plan has expanded with the identification of a second technical center for closure.
In the third quarter financial results statement where the closure was unveiled, Cooper Standard noted that goal is to close the facility by the end of the calendar year.
The move expands a cost-savings plan unveiled in February that calls for closure of two manufacturing facilities and one technical facility by Dec. 31. That plan remains on track, Cooper Standard said in its third quarter results, adding that one of the manufacturing facilities has been shuttered.
“Cooper Standard is in the process of consolidating our four locations in southeast Michigan to our Global Technology Center (GTC) in Livonia, Mich., and our new World Headquarters in Northville, Mich.,” a company spokeswoman said in an emailed statement. “With the addition of the equipment from Auburn Hills, our Global Technology Center will now support all of our core product lines for sealing, fuel and brake delivery, and fluid transfer systems.
“In addition, the GTC also serves as the center for our Advanced Technology group, which is furthering our diversification strategy and launching our Fortrex Chemistry platform into new diverse markets.”
The decision to consolidate operations will provide “significant cost savings,” according to the company, which employs around 700 people in southeastern Michigan. Some of those savings also are coming from a work-from-home model that is being folded into everyday operations.
According to the company spokesperson, Cooper Standard implemented work-from-home practices when the COVID-19 pandemic began to peak in North America.
“Much of Cooper Standard’s salaried work force has been working remotely since March 2020 due to the COVID pandemic,” she said. “This model has proven to be very successful and as a result, the company decided to transition to a hybrid model of remote working and shared office space in the future.”
Cooper Standard’s plan to cut costs also calls for the sale of “non-strategic assets,” and the company took a major step toward that end with the divestiture of assets in Europe and India to Mutares S.E. & Co. KGaA.
In July, Cooper Standard finalized the sale of three rubber fluid transfer systems plants—two in Poland and one in Spain—along with a factory in Italy that makes finished goods as well as compounds for specialty sealing products for the European operations.
In India, Mutares acquired seven locations that make sealing, fuel and brake products and systems.
Combined, the European and Indian divestiture impacted about 2,500 employees.
In its most recent financial report, Cooper Standard noted that the divested assets had combined revenue of about $200 million, adjusted EBITDA loss of about $14 million and a negative cash flow of around $20 million.
Overall, the third quarter was solid for Cooper Standard, which posted sales of $683.2 million and a net income of about $4.4 million, an improvement over the $4.9 million net loss posted in third quarter last year.
For the nine months ended Sept. 30, Cooper Standard recorded sales of about $1.68 billion, down from the $2.38 billion for the same time period a year earlier. Year-to-date, the company posted a net loss of $240.4 million, a significant swing from the net income of $134.9 million for the first three quarters of 2019.
Despite the challenges faced in 2020, Cooper Standard remains optimistic about the road ahead. The company, as of Sept. 30, had cash and cash equivalent assets of about $462.7 million. It also reported $150.2 million available under its amended senior asset-based revolving credit facility, inclusive of outstanding letters of credit, for total liquidity of $612.9 million.
Because of the looming pandemic and its uncertain impacts on the auto industry overall, Cooper Standard did not issue formal financial guidance.