Automodular Corporation: Ford Contract Update Press Release: Automodular Corporation – 2 hours 30 minutes ago
AJAX, ONTARIO--(Marketwired - May 14, 2013) - Automodular Corporation (AM.TO) ("Automodular" or the "Company") reports that it has been advised by Ford Motor Company ("Ford") that Ford intends to insource the sub-assembly and sequencing services currently performed by Automodular for its new program scheduled to commence in the second half of 2014. Automodular's existing contract with Ford expires June 30, 2014; however Ford has expressed a desire to have the Company continue to provide services until the fourth quarter of 2014. At that time, Automodular expects to close its two remaining operating facilities located in Oakville, Ontario.
The financial impact of the closure is estimated to be an after tax loss of approximately $6 million with the majority of those costs expected to be recorded in 2013. The Company expects some variation in the total costs as a result of the extended length of time between this announcement and the expected facility closures. Automodular will re-examine its cost estimates on a quarterly basis and will revise those estimates as circumstances change or additional information becomes available.
Automodular continues to be focused on its diversification efforts. The Company is starting to see some additional traction in its business development efforts in the wind energy space and is working with external consultants to identify and assess opportunities to leverage its operational skills and financial resources. Should Automodular be unsuccessful in these efforts, the Company will not have active operations following the closure of its Oakville facilities.
Automodular Corporation is a supplier of sub-assembly, sequencing and transportation services to the automotive industry. The Company has two operating facilities and employs approximately 525 people.
PS. So unless they find another auto company to service or come up with some contracts for wind energy, this company will be bye bye by end of 2014. Year and a half to find out means what for current shareholders? Crash the stock? Maybe, maybe not since it is still an operating entity until at least end of 2014. Decision now is to wait to see them get more business elsewhere or from their wind energy stuff or sell regardless of dip tomorrow or in next few days, weeks, Qs......