The paper deals with a transfer line reconfiguration problem. Such lines are made of machines (workstations) located in sequence and linked by a material handling device. Each machine can be equipped with several multi-spindle heads activated sequentially. Each spindle head executes a set of operations simultaneously. If new products have to be manufactured at the line or existing products are modified, then the line has to be reconfigured in order to meet new production requirements. The objective of such reconfiguration is to reduce the investment cost for new equipment by reusing optimally the existing facilities. A new mathematical model is suggested for this optimization problem. A case study is presented to demonstrate the use of the developed optimization model. The results of numerical experiments for 41 industrial test problems are also analyzed which show that up to 51 % investment savings can be obtained with this model.