A new product line and plant expansion have turned sour for Miller Industries.
The Ooltewah towing equipment manufacturer expects to lose more than $1 million during the fourth quarter this year on a joint venture to produce large, over-the-road trailers under the Delavan brand.
Miller Industries spent $1.8 million to add the product line to its Greeneville, Tenn., plant in August. The line of trailers added 58 jobs to the plant. But now Miller is cutting back on the unprofitable Delavan line, which is a joint venture between Miller Industries and the Lohr Group, a private French transportation company.
"Operations related to the Delavan joint venture have been reduced in an effort to minimize future losses," the company said in a release. "[Miller Industries] will continue to evaluate the viability of the joint venture and to focus on additional steps to reduce its future losses, including consideration of whether each of the joint venture's products can be produced profitably."
Vince Mish, executive vice president and chief financial officer, could not be reached for comment Monday. In November, Miller Industries CEO Jeff Badgley told investors that progress on the Delavan trailers was going slower than expected, but demand was still high.
"We have begun to produce trailers and continue to prepare our facility and workforce for production increases," he said. "Progress has been slower than anticipated. We remain encouraged by the demand levels in the market for the Delavan product."
Miller Industries said in a release that it could not estimate the impact of the joint venture on future financial results.
The company also announced a change in its top leadership Monday. William Miller II, who was serving as president of Miller Industries, was named Co-Chief Executive Officer, joining Badgley, who will remain in the role and will continue to oversee the Delavan venture.
The move is part of Miller Industries existing succession plans, the company said.
Contact staff writer Shelly Bradbury at 423-757-6525 or email@example.com.