LAFAYETTE, Ind. (AP) — Semi trailer maker Wabash National Corp. said Thursday it will spend about $25 million to build a production facility to streamline production and improve costs.
Once built, the Franklin, Ky., plant will allow trailers to be built near new customers, reduce the average production cost per trailer and boost margins, the company said in a release.
Wabash is receiving an incentive package from the state of Kentucky to build the facility on a 60 acre parcel of land, the company said. Construction is expected to begin in late 2008 or early 2009, depending on market conditions, the company said.
''While the trailer market faces current headwinds, we are taking steps today to improve our long-term cost position,'' President and Chief Executive Officer Dick Giromini said in a release. ''Even at cyclically low production levels, these initiatives are expected to favorably impact our margins.''
While the trailer market is slow today, it will likely improve within two years at which point Wabash will be in a great position to grow, he said.
Wabash said it will pay for the facility through Internal Revenue bonds, lease deals and operating cash flow, and that its impact on 2008 results will be ''immaterial.''
Shares of Lafayette, Ind.-based Wabash fell 78 cents to close at $40.87.