Wheel Maker to Lay Off 375

Leading aluminum wheel maker Superior Industries International Inc. said Wednesday that it would fire 375 employees, or nearly 6% of its workforce, as it tried to steer the company in a new direction.

The layoff affects more than half of the 635 manufacturing workers at its Van Nuys plant and comes amid a difficult time for the industry, which has been beset by increased competition and a slowdown in production by U.S. automakers.

Superior, North America’s largest supplier of wheels for cars and trucks, has been particularly squeezed, analysts said.

In addition to fending off Chinese competitors, the Van Nuys-based company has had to combat aggressive pricing from its domestic competitors and grant price concessions to General Motors Corp. and Ford Motor Co., its two largest customers.

Chief Executive Steven Borick said the layoffs were part of the company’s larger efforts to match the level and location of wheel production to changing customer demand.

“Going forward, our Van Nuys facility will concentrate on specialty operations,” Borick said in a statement. “By focusing on our strengths, we believe this facility will be profitable at lower volumes.”

The corporate offices and 125 corporate staff members headquartered at the plant will not be affected.

Superior, which operates 11 plants employing 6,600 people in the U.S., Mexico and Europe, said it expected to incur about $1.5 million in severance and other layoff-related costs in 2006.

Analysts had mixed reactions to the restructuring plans of Superior, which earned $13.3 million on revenue of $626 million in the first nine months of 2005, compared with earnings of $32.7 million on revenue of $667 million a year earlier.

Atul Agarwal, an analyst with Sidoti & Co., said reducing costs by moving from high-cost, inefficient plants to modern, low-cost ones -- as the company has said it was doing -- was a promising strategy.

But Michael Bruynesteyn, a Prudential Equity Group analyst, rated Superior as “underweight” in a January report. He wrote that even after a restructuring, “we believe that the current trading range of mid-$20s is not warranted.”

Superior’s stock rose a penny to $23.21.

Shares traded between $19.79 and $28.05 over the last year.