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Tyco to reorganize automotive ops in Europe

Posted: 08 Sep 2008 ?? ?Print Version ?Bookmark and Share

Keywords:automotive operations streamline? Tyco Europe market? plant closure?

Tyco Electronics Ltd plans to consolidate production of its automotive products in key manufacturing sites throughout Eastern and Western Europe. The proposed changes, which are subject to consultation with several local works councils and the European Works Council, would involve three automotive plant closures and restructuring of operations at several facilities in Spain and France, and would impact approximately 850 employees.

According to Tyco CEO Tom Lynch, "These actions are the next steps of the broader strategic initiative announced last year to streamline our operations and improve our productivity in all areas of our business."

Based on current foreign exchange rates, the Tyco estimates that charges associated with the European automotive restructuring plan will be approximately $155 million, with an expected completion target within 15 months. In the fiscal Q4, the company now expects restructuring-related costs of approximately $135 million, or 27 cents per share. This compares to prior guidance of $67 million, or 9 cents per share for the quarter. As a result, the company now expects GAAP diluted EPS from continuing operations 38 to 40 cents for the quarter. On an adjusted basis, the Tyco continues to expect EPS from continuing operations of 65 to 67 cents for the quarter. As previously disclosed, the company expects an average payback of approximately three years on costs associated with its overall manufacturing footprint simplification program.

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