LATROBE, Pa. — Kennametal expects to close three to five plants within the next four years in a $100 million cost reduction and efficiency program that is being billed as the second generation of its transformation initiative that it expects to drive further financial returns.
Kennametal (NYSE: KMT) already has shut six plants and reduced its headcount by about 20% over the past several years of a modernization under CEO Christopher Rossi beginning in 2019. Among the facilities shut were in Irwin and Lichtenau, Germany. Those moves saved the company about $200 million in structural costs and replaced old aging equipment with state-of-the-art technology and more automation so that Kennametal could do more with less. Friday, the Pittsburgh-based company hosted Wall Street analysts and sketched out the next few years that included the new $100 million in planned savings and plants.
There weren’t many other specific details about the plants that could be closed, but Kennametal said the closings and other reductions would not only remove costs from the business but also improve margins and other financials. It positioned the closings as a way to make Kennametal more efficient and set it up for future growth, which are expected to be higher than the overall growth rates in the markets it serves.
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