AMSC has announced a series of strategic operational initiatives designed to better capitalize on emerging opportunities in the wind and grid businesses. These measures include consolidation of the company's US grid manufacturing and product development program and diversification of its international wind power manufacturing operations.
As part of its Gridtec Solutions consolidation, AMSC expects to close its facility in Middleton, Wisconsin by December 31, 2014 and transition that unit to its headquarters in Devens, Massachusetts. The company's New Berlin facility remains unaffected. All of AMSC's employees in Middleton are expected to be offered the opportunity to relocate to Massachusetts. Separately, AMSC also undertook a reduction in force in its Massachusetts facility. As part of the diversification of its wind power manufacturing operation, AMSC is establishing a wind turbine electrical control systems manufacturing center in Timisoara, Romania. Expected to be operational in fiscal 2014, the Timisoara plant will make electrical control systems for AMSC's wind customers located outside of China. AMSC's China facility will continue to support the Chinese wind market and headcount is being adjusted accordingly. Customers outside of China will continue to have their systems manufactured in China until the new facility is operational. The company's Windtec Solutions product development and support efforts remain unaffected. As a result of these actions, AMSC expects to reduce its net headcount between 5% and 10% by December 31, 2014. During this same period of time, AMSC expects to record restructuring and other charges associated with these actions for severance, facility closure, relocation, operating inefficiencies, and other costs of between US$ 4 million and US$ 6 million, excluding any non-cash impairment charges which have yet to be determined. Of these charges, AMSC expects to record approximately US$ 1 million in restructuring charges in the fourth quarter of fiscal 2013. Once these actions are completed, AMSC expects to fully realize approximately US$ 3 million of annualized cost savings starting in the fourth quarter of fiscal 2014.
