Operations
Kennametal’s Cost Savings Plan to Include 3-5 Plant Closures
The closures would happen as part of the company's Operational Excellence and Capacity Optimization initiative.
Kennametal Inc. (NYSE: KMT) announced today the election of Paul Sternlieb to its board of directors, effective January 1, 2023. Sternlieb is currently the President and CEO of Enerpac Tool Group, a premier industrial tools and services company.
As part of a $100 million cost savings initiative, metalworking supplier Kennametal announced plans to close three to five plants, according to documents from the company’s Sept. 8 investor day event.
Kennametal didn’t specify which plants would close or when the closures would take place, only that the closures would happen as part of the company’s Operational Excellence and Capacity Optimization initiative.
The initiative also includes $20 million from a previously announced restructuring program, continuous operational improvement of approximately 1% of cost of sales per year, and inventory optimization.
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“Taken together, the growth and productivity initiatives within our plan give me confidence that we will drive long-term value for shareholders,” said President and CEO Christopher Rossi. “We will also continue to execute a balanced capital allocation strategy to maximize shareholder value while funding the growth plan laid out today. We remain committed to returning cash to shareholders and executing a disciplined M&A and organic investment strategy to support and accelerate our growth.”
In a PowerPoint slide titled “Successful execution of Simplification/Modernization enables pathway for growth,” the company lists approximately $200 million in structural costs savings, six fewer plants and a 20% reduction in global workforce under the heading “Operational Excellence.”
