Tenneco Incorporated (NYSE:TEN) announced last month it intended to discontinue its Marzocchi motorcycle and bicycle suspension business and liquidate Marzocchi operations. Following a consultation process with employee representatives, it looks like that is what’s going to happen. Tenneco employs 127 people at its Marzocchi plant in Bologna, Italy, and an additional 11 people in its operations in North America and Taiwan. It expects to complete the closure by the end of 2015. Sad news; brothers Guglielmo and Stefano Marzocchi began their suspension business in 1949, after having broken into the motorcycle industry at Ducati.
“We sincerely regret the impact these actions would have on our Tenneco Marzocchi employees, and thank them for their tireless efforts to improve performance and reduce costs. Unfortunately, it was not enough to overcome continuing market challenges in the two-wheeler business,” said Brian Kesseler, chief operating officer, Tenneco. “We are committed to working with our employees’ representatives, and with our customers to make the transition as smooth as possible.”
Tenneco expects to record charges of approximately $27 million related to these actions in the third quarter which includes approximately $17 million of cash expenditures. These charges consist of severance and other employee related costs, asset impairment charges and other expenses related to the closure. The company anticipates improving financial results by approximately $7 million annually, beginning in 2016.
Tenneco is an $8.4 billion global manufacturing company with headquarters in Lake Forest, Illinois and approximately 29,000 employees worldwide. Tenneco is one of the world’s largest designers, manufacturers and marketers of clean air and ride performance products and systems for automotive, commercial truck, and off-highway original equipment markets, and the aftermarket. Tenneco’s principal brand names are Monroe, Walker, XNOx and Clevite Elastomer. It has more than 500 aftermarket customers and supplies more than 25 OEMs including Audi, Fiat, Ford, GM, Honda, Jaguar, Mazda, Porsche, and others.