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    Water Products To Consolidate Residential Production in Ashland City, Juarez

    Ashland City, TN (Monday, 07 July 2003)

    Water Products to consolidate residential water heater production in Ashland City, Juarez Water Products Company today announced it will consolidate production of residential water heaters in its Ashland City, Tenn., and Juarez, Mexico, operations.

    Residential water heater fabrication and assembly work in the McBee, S. C., plant will be transferred to Ashland City and Juarez. The production transfer is scheduled to begin within the next several weeks and will conclude by the end of the first quarter of 2004, according to Ron Massa, president of Water Products.

    "The residential water heating industry is undergoing significant changes, due to new regulatory standards and ongoing competitive pressure. By consolidating residential fabrication and assembly in Ashland City and Juarez, we will be strategically located to best serve our customers."

    "We have made substantial investments to comply with the new regulations that impact our residential product lines, and this transfer will allow us to concentrate additional investment in these two facilities."

    "The McBee plant will now be our flagship commercial water heater and boiler facility with a reputation for world-class quality and delivery," Ron continued. "We recently announced that we will transfer commercial boiler assembly to McBee, and earlier this year, we relocated the State commercial water heater brand to that plant."

    The residential transfer will necessitate a reduction in the McBee work force over the coming months. The company will be offering employment assistance and a package of benefits to those employees affected by this transfer. Beginning later thisweek, the company will conduct small group meetings to describe the details of these programs.

    The 1.5 million-square-foot Ashland City facility, the world's largest water heater manufacturing plant, currently manufacturesState and Reliance brand water heaters as well as a number of private-brand models and Apollo HydroHeat and cooling systems. The plant, which opened in 1961, was part of A. O. Smith's acquisition of State Industries in December 2001.

    A. O. Smith opened the 265,000-square-foot Juarez plant as a focused residential water heater facility in 1986. Theplant manufactures the A. O. Smith brand and principally serves the U. S. residential market west of the Mississippi River.

    The 800,000-square-foot McBee plant opened in 1980 as a residential water heater facility. It began producing standardcommercial water heaters in 1987 and today manufactures A. O. Smith's complete line of standard commercial units. McBeealso is the location of the company's Product Engineering Center.

    Headquartered in Ashland City, Tennessee, A. O. Smith Water Products Company is a leading manufacturer and marketer of residential and commercial water heaters and hydronic boilers. For more information, visit

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