>BY DAN HART
BLOOMBERG

Hayes Lemmerz International Inc., the largest maker of automobile wheels, will restate results for its fiscal year ended in January and the first quarter of its current year, widening losses because of accounting errors.

The previously reported fiscal 2000 net loss of $41.8 million, or $1.41 a share, is expected to widen by at least $14.7 million, or 50 cents, the company said in a statement. Its first-quarter loss of $7.6 million, or 27 cents a share, will increase by at least $27.1 million, or 95 cents, Hayes said.

Hayes' board also elected Curtis Clawson as chairman, replacing Ranko Cucuz. Clawson was hired last month to take over as president and chief executive from Cucuz. The former chairman will remain on Hayes' board, said spokesman Lewis Phelps.

The accounting problem is "not a small error and it's an unacceptable area to be erring in," said Charles Brady, an analyst with Credit Lyonnais Securities Inc. who lowered his rating on the company last week to "hold" from "buy."

Hayes also said it's in talks with lenders because the company isn't in compliance with financing terms, without providing specifics.

Wednesday's announcements come after Hayes postponed the release of results for its second quarter ended July 31. The company has cut about 1,350 workers, or 9 percent, since December as automakers ordered fewer wheels and delayed vehicle introductions.

Hayes has notified the U.S. Securities and Exchange Commission of the accounting errors, and the company's own investigation is continuing, Phelps said. The SEC hadn't investigated Hayes or contacted it about the errors, he said.

The problems came to light in the past several days and prompted the delay in second-quarter results, Phelps said.

In a statement, the company attributed about half of the accounting errors to a manufacturing plant that has had continued operating problems. The company said it's considering alternatives for the plant, which it declined to identify. Hayes didn't provide any further details about the errors.

Hayes also said it will write down the value of assets at its Petersburg, Mich., factory.

"These accounting errors occurred because of a failure within certain parts of the company to comply with sound and well-established accounting policies," said John Rodewig, a director and chairman of the board's audit committee, in the statement.

The committee hired Skadden, Arps, Slate, Meagher & Flom LLP and Ernst & Young LLP to help with its review.

"The board will take appropriate action to hold responsible parties accountable," Rodewig said.

Hayes shares didn't trade Wednesday because of pending news after the company said it would delay reporting the second-quarter results. The stock fell 23 cents to $4.15 Tuesday and has declined 38 percent this year.

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-- Anonymous, September 06, 2001