Racine, Wisconsin – CNH Global (NYSE:CNH) said
today that it will create a tractor assembly
operation in Racine, Wisconsin, separate from the
existing tractor production facility that the
company previously said it would close. The
assembly operation will be at the same location as
the company's transmission plant in Racine and
will supply large, row-crop tractors for North
America and other markets around the world.
Both New Holland and Case branded tractors will be
produced at the Racine facility.
The company recently finalized a $5.625 million
economic incentive package from the state of
Wisconsin that, together with a new work agreement
reached with United Auto Workers last week, make
it possible for the company to develop the new
assembly operation. In addition, the Racine County
Economic Development Corporation will provide a
$400,000 loan for the project. Based upon current
production levels, the operation is expected to
employ approximately 125 hourly workers. However,
employment would flex in accordance with
production levels. The agricultural equipment
market is currently in a low demand period, as a
result of low farm commodity prices. The labor
agreement also makes it possible for CNH to
proceed with negotiations to sell its foundry,
which is adjacent to the Racine tractor plant.
"I am extremely pleased that we were able
to work together with the union and state and
local government officials to keep Racine a source
for supplying tractors," said Jean-Pierre
Rosso, chairman. "This solution fits well
with our industrial consolidation effort and will
make CNH more competitive, while ensuring a high
quality tractor for our customers, based upon a
global product platform."
"We are in the midst of a multi-year
integration plan that is expected to create at
least $600 million in synergies for CNH and an
assembly operation for row-crop tractors is
consistent with our goal of lowering fixed costs
and leveraging our production volume for greater
efficiency," added Paolo Monferino, president
and chief executive officer. "This is a
positive solution for everyone."
CNH announced in June 2000 that it would close
the current tractor manufacturing plant in Racine
as part of a worldwide consolidation of the
company's industrial operations. The company was
considering several options for production of
row-crop tractors, including consolidating tractor
manufacturing at another CNH facility. In North
America, CNH makes four-wheel-drive tractors at
its plant in Fargo, North Dakota, and assembles
compact tractors at its Dublin, Georgia, plant.
With strong global brands, CNH is a leader in
the agricultural equipment, construction equipment
and financial services industries and had combined
1999 revenues of approximately $11 billion. CNH
sells its products in 160 markets through a
network of more than 10,000 dealers and
distributors. CNH products are sold under the
following brands: Case, Case IH, Fermec, Fiatallis,
Fiat-Hitachi, Link-Belt earth-moving equipment,
New Holland, New Holland Construction, O&K and
Steyr.
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