From Scotland to Malta

As Methode Electronics second quarter profit declines, all production lines are transferring to Malta from Scotland after the New Year. From The Houston Chronicle:

Methode Electronics, which makes electronic connectors used by automakers, said Thursday its fiscal second-quarter earnings slid 6 percent as lower North American automobile output resulted in sales declines. Net income fell to $4.9 million, or 13 cents per share, from $5.2 million, or 14 cents per share, a year ago. Last year's results include a $2.1 million bad debt provision related to the bankruptcy of Delphi units in the U.S...

"As anticipated, we experienced a solid increase in our European automotive sales," said Donald W. Duda, president and CEO. "This was offset by a steep decline in North American automobile output during Methode's second quarter resulting in a 9.8 percent decline in sales in our automotive segment, excluding customer paid tooling sales, compared to last year's second quarter." The company said its power distribution segment reported increased sales during the second quarter both domestically and in Asia. Cost of products sold increased to 82.2 percent of net sales from 80.3 percent last year, due to automaker production volume declines, contractual price reductions, inefficiencies in the company's Scotland facility and higher material costs.

Starting Friday, Methode will begin transferring all production lines in its Scotland facility to Malta. These lines produce automotive electronic components. Production in Malta is expected to begin after the New Year holiday. Total cost of the transfer is forecast to be $2.2 million to $2.9 million, resulting in a reduction of earnings per share of 6 to 8 cents per share in the second half of the year. After the 2007 fiscal year, Methode said it expects annual savings of closing the Scotland facility will be about $2.5 million...