Item 2.05 Costs associated with eviction or disposal activities.
upon January 13, 2023,board of directors Proterra Inc. (“Company”) has approved plans to improve operational efficiency, including company-wide workforce reductions (“Workforce Restructuring”) and the closure of our City of Industry facilities (“Facility Closures”). The City of Industry facility currently manufactures electric transit buses and our current generation battery systems. The company plans to move manufacturing from its City of Industry facility to an existing facility.
south carolinaCity of Industry production of fixed-route buses will end in the first quarter of 2023, and battery production will end in the third quarter of 2023. The company plans to decommission his facility by the end of 2023.
The workforce restructuring plan will reduce our current headcount by approximately 25% and is expected to affect approximately 300 employees, including facility closures. We believe these plans will improve overall efficiency by increasing utilization of our largest manufacturing sites. greenville When Greer, South Carolina, streamlines supply chain and distribution logistics, reduces organizational complexity and reduces facility costs. Severance pay will be provided to affected employees. We will begin closing our facilities and rebuilding our workforce immediately.
The final costs associated with closing the facility and rebuilding the workforce will not be known until all related activities are completed. The Company currently expects to incur restructuring charges. $6 million When $10 million Primarily due to net cash payments for retirement benefits to employees; and $4 million To $5 million Facility closure costs, which consist primarily of leasing costs, material and equipment transfers, and removal of tenant improvements related to facility closures. Such restructuring charges are expected to continue from the first quarter of 2023 through the end of 2023. In addition, in connection with our employee restructuring and facility closures, we are conducting impairment analyzes of certain assets, plants and facilities. We may incur non-cash impairment charges. The Company currently plans to use equipment from the City of Industry facility elsewhere and, at the time of this report, is unable to estimate potential impairment charges related to facility closures and workforce restructuring.
The above costs and fees, and their timing, are preliminary estimates based on our current forecasts and are subject to a number of assumptions and risks. Actual results may differ materially from such estimates. We may also incur other currently unanticipated costs, expenses, future cash outlays or impairments due to events that may occur as a result of or related to personnel restructuring and facility closures. .
Section 7.01 Regulation FD Disclosure.
upon January 19, 2023, the Company has issued a press release regarding the facility closures and personnel restructuring described in item 2.05 above. A copy of the press release is provided as Exhibit 99.1 to this current report on Form 8-K.
The information in Section 7.01 of this Report, including Exhibit 99.1 attached hereto, shall not be deemed to have been “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Securities Exchange Act”) and may be referred to. shall not be deemed incorporated on any U.S. stock exchange by Company filings under the Securities Act of 1933 or the Securities Exchange Act, as amended.
Cautionary Note Regarding Forward-Looking Statements
This report contains “forward-looking statements” within the meaning of federal securities laws relating to facility closures and personnel restructuring. Related Charges, Expenses and Impairments. Our plans to improve business efficiency. This includes the expectation that such plans will improve overall efficiency by increasing utilization of our largest manufacturing sites. greenville When Greer, South Carolina, streamlining supply chain and distribution logistics, reducing organizational complexity, reducing facility costs, and our expectations of using equipment from City of Industry facilities elsewhere. These statements are based on assumptions currently believed to be valid, but are subject to significant risks and uncertainties.
Actual results may differ materially from those expressed in the forward-looking statements. Such risks and uncertainties include, among other things, the possible impact of facility closures and workforce restructuring on our business relationships and results of operations. The extent to which facility closures and personnel restructuring may disrupt the company’s current plans and operations. and the ability of the company to successfully integrate its production. greenville When Greer facilities of south carolinaThe preceding list of factors is not exhaustive. Additional risks and uncertainties that could cause our actual results to differ materially from those expressed in forward-looking statements include: Securities and Exchange CommissionIncludes Annual Report on Form 10-K, Quarterly Report on Form 10-Q and Current Report on Form 8-K. The forward-looking statements contained in this report are made only as of the date of this report. Readers are cautioned not to place undue reliance on forward-looking statements. We undertake no obligation to update forward-looking statements to reflect subsequent events or circumstances.
Item 9.01 Financial Statements and Materials.
Exhibit Number Exhibit Description
99.1 Press Release issued by Proterra on January 19, 2023
104 Inline XBRL for the cover page of this Current Report on Form 8-K.
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