Tenneco plant closure to cost 500 jobs

Tenneco Inc., the largest North American maker of shock absorbers, said it will shut a factory in Cozad, Nebraska, by the end of next year and shift production of the parts to plants in Georgia, Arkansas and Celaya, Mexico.

The closing will save $8 million annually, the Lake Forest-based company said in a statement today. The plant has 460 hourly and 40 salaried positions, and Tenneco said it will offer transition assistance and record costs of as much as $20 million for the move. The shares rose the most in a month.

Tenneco is consolidating its businesses after U.S. automakers reduced purchases as sales fell in the recession. The Nebraska shutdown is part of a restructuring announced in October 2008, and Tenneco expects $11 million in charges in the third quarter of 2009.

"Industry conditions have stabilized enough for us to move forward on our original plans to consolidate our ride control capacity in the United States, which we need to do in order to strengthen our long-term competitiveness in this critically important market," Chief Executive Officer Gregg Sherrill said in the statement.

Tenneco gained 92 cents, or 6.6 percent, to $14.89 at 12:33 p.m. in New York Stock Exchange composite trading. The shares climbed as much as 7.4 percent, to $15.01, for the biggest intraday advance since Aug. 18.