Clark files for bankruptcy

By Staff -- Modern Materials Handling, 5/1/2000

Citing high costs in the United States, overcapacity, and its leveraged capital position, Clark Material Handling Company has voluntarily filed for reorganization under Chapter 11 of the Bankruptcy Code. Announcing the action on April 17, Clark said it will consolidate U.S. manufacturing operations.

Clark will close its main plant in Lexington, Ky., by year's end. Production and assembly of lift trucks will shift from this plant to facilities in Korea and Germany and to Clark's Blue Giant subsidiary plant in Alabama.

Clark will continue to provide products, parts, and services to its dealers and customers, says Dr. Martin M. Dorio, Jr., chairman and CEO.

But Dorio says that for Clark's U.S. manufacturing operations "to have the opportunity to return to profitability, the consolidation is a necessary part of the process. We can lower our cost structure and reduce overcapacity by closing the Lexington plant."

A Korean plant will build three- and four-wheel electric lift trucks. In Germany, a plant will make electric and internal combustion (IC) powered lift trucks. In the U.S., reach truck production will be added to the Alabama plant's hand and electric pallet trucks. Clark will outsource production of its large IC and electric trucks to other, high quality manufacturers.

"The decision to close our Lexington facility, where we have deep roots and so many valued employees, is exceedingly painful," Dorio says. "It is, however, absolutely necessary in light of our current overcapacity, which translates into an unprofitably high cost structure. We simply could not continue operating as we have been."