The Manitowoc Company, Inc. (NYSE: MTW) announced that due to recently identified supplier delivery issues with certain hydraulic components, the shipment of some crane products will be delayed into the first quarter of 2012.
In addition, the company is announcing to the financial community today that the International Association of Machinists (“IAM”) Local 516 workers at its Manitowoc Cranes facility in Manitowoc, Wisconsin have been on strike since 3:00 PM CT, Monday, November 14. The previous contract expired on October 31, 2011. Negotiations held in front of a federal mediator late last week did not result in meaningful progress, and thus management is not certain how long the strike will continue.
Manitowoc expects the negative financial impact of the component delivery matters, coupled with the IAM strike, corresponding layoffs, and contingency plans, to negatively affect fourth-quarter crane sales and operating earnings by approximately $35 million and $10 million, respectively. In addition, the timing of cash collections due to these production disruptions and inefficiencies is expected to result in the company’s debt reduction being near or below the low end of its previously announced $150 to $200-million target range.
As an update regarding customer order activity, Manitowoc disclosed that order flow remained at levels consistent with the rate of the prior four quarters. Glen E. Tellock, Manitowoc's chairman and chief executive officer commented, “With the exception of the crawler crane product line that has remained relatively soft, we are pleased with the order activity in other product lines in most markets. In addition, our Foodservice business continues to perform well, and in accordance with the guidance we provided in our third-quarter earnings announcement.”About The Manitowoc Company, Inc. The Manitowoc Company, Inc. is a multi-industry, capital goods manufacturer with nearly 100 manufacturing, distribution, service, and/or office facilities in 26 countries. It is recognized as one of the world's largest providers of lifting equipment for the global construction industry, including lattice-boom cranes, tower cranes, mobile telescopic cranes, and boom trucks. Manitowoc also is one of the world's leading innovators and manufacturers of commercial foodservice equipment serving the ice, beverage, refrigeration, food prep, and cooking needs of restaurants, convenience stores, hotels, healthcare, and institutional applications.
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