HAYZ Hayes Lemmerz International (MM)

NORTHVILLE, Mich., April 7 /PRNewswire-FirstCall/ -- Hayes Lemmerz International, Inc. (NASDAQ:HAYZ) announced today a series of actions to strengthen its competitive position, improve profitability and increase long-term value for its shareholders. Curtis Clawson, President, Chief Executive Officer and Chairman of the Board said, "The last several years have seen profound changes in the competitive landscape of the automotive industry. We are aligning our organization to recognize the realities in the U.S. and to assure continued success in the global automotive marketplace." Today's announcements include: * Consolidation of its components operations into an Automotive Components Group * Reduction of its wage and benefit costs The Company previously announced: * Strategic realignment of its wheel business into a Global Wheel Group * Rationalization of its aluminum wheel manufacturing capacity in the U.S. * Amendment to its $625 million senior secured credit facility Consolidation The Company announced today that it is consolidating its Suspension Components business unit and its Automotive Brake and Powertrain Components business unit, creating an Automotive Components Group. This move is aimed at improving the Company's market focus and streamlining its organizational structure, resulting in a reduction in its corporate and business unit staffs by approximately 45 employees and reducing related costs. As part of this reorganization, the Company appointed Daniel M. Sandberg to the new position of President of the Automotive Components Group. Mr. Sandberg had been President of the Automotive Brake and Powertrain Components business unit. "We are operating in a highly competitive and challenging business environment," said Mr. Clawson. "This restructuring will make Hayes Lemmerz a leaner, more competitive company that can respond more effectively to business needs and changing market conditions." Revised Wage and Benefit Plans As part of its continuing efforts to cut costs, the Company announced today that it is reducing several of its employee wage and benefit programs, primarily at its U.S. locations. These actions include reducing base pay up to 7.5% for its U.S. employees, 10% for the Company's President and Chief Executive Officer and 20% for the Company's Board of Directors, temporarily suspending Company contributions to employee 401(k) plans and restructuring the Company's short term incentive compensation plans for hourly and salaried employees. "While the wage and benefit changes are difficult, they are necessary for our business to effectively compete against foreign competition," said Mr. Clawson. "The actions announced today will reduce our operating costs, and as part of Hayes Lemmerz' overall cost-improvement initiative, help increase the long-term value of the Company. We're being fiscally responsible, while continuing to provide a fair and competitive compensation package." Strategic Realignment As announced in January, the Company strategically realigned its wheel business to strengthen coordination and synergies worldwide. The move combined the Company's North American and International Wheel business units, creating a Global Wheel Group. This move has already resulted in a reduction of over 15% of its staff in the U.S., in the first quarter of 2006. "We will continue to look at additional efficiencies in the organization as capacity is adjusted and launches are completed," said Fred Bentley, Chief Operating Officer and President of the Global Wheel Group. U.S. Aluminum Wheel Capacity Rationalization As announced in March, the Company will close its aluminum wheel manufacturing facility in Huntington, Indiana. Remaining production will be transferred to the Company's other aluminum wheel facilities in North America. The Huntington facility will operate through the Company's second quarter of 2006 to service existing contracts and assist in transitioning production. The decision to close the plant was part of the Company's ongoing plan to maximize capacity utilization and overall cost efficiencies. About 185 employees will be affected by this action. Financial Impact Hayes Lemmerz expects the combined cost savings from all of the restructuring actions, including the wage and benefit reductions, to generate annual cost savings of at least $35 million. Credit Agreement Amendment The Company also recently announced that it has amended its $625 million senior secured credit facility. Among other changes, the amendment favorably modifies certain financial covenants. "This amendment provides the Company with additional financial flexibility to execute our strategy of product leadership and growth in select geographic regions. We appreciate our lending group's continuing support of our strategic direction and financial priorities," said Mr. Clawson. 2006 Outlook In 2006, the Company will continue its focus on improving free cash flow and controlling capital expenditures, which are targeted at less than $100 million. The Company expects sales for 2006 to be approximately $2 billion, primarily due to reductions in North American volumes. The Company expects adjusted EBITDA and free cash flow to improve in 2006 versus 2005. Hayes Lemmerz International, Inc. is a world leading global supplier of automotive and commercial highway wheels, brakes, powertrain, suspension, structural and other lightweight components. The Company has 35 facilities and approximately 10,000 employees worldwide. This press release includes forward looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, which represent the Company's expectations and beliefs concerning future events that involve risks and uncertainties which could cause actual results to differ materially from those currently anticipated. All statements other than statements of historical facts included in this release are forward looking statements. Factors that could cause actual results to differ materially from those expressed or implied in such forward looking statements include the factors set forth in our periodic reports filed with the SEC. Consequently, all of the forward looking statements made in this press release are qualified by these and other factors, risks, and uncertainties. DATASOURCE: Hayes Lemmerz International, Inc. CONTACT: Marika P. Diamond of Hayes Lemmerz International, Inc., +1-734-737-5162 Web site: http://www.hayes-lemmerz.com/

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