HVAC appliance maker York International Corporation announced a restructuring program designed to improve its cost structure and service to its customers. The actions, which will be concentrated in Europe, will begin in the third quarter of 2005 and are expected to be fully implemented by March 2007.
The program includes plans to divest non-core operations at an appropriate price, close one manufacturing facility and significantly downsize another factory. The actions are expected to reduce the Europe, Middle East and Africa (EMEA) region workforce by approximately 1,300 employees, or 20 percent.
President and CEO C. David Myers said, "These actions will support our objective to deliver significant long-term improvements in our operations. I am confident that the planned actions will be executed well and will allow us to better support our customers and position us for steady profitable growth in the European markets."
Under the restructuring program, in the event that York would remain an independent public company, U.S. $100 million of pre-tax expenses would be charged to the income statement over the next 7 quarters; cash expenses of approximately $75 million and capital expenditures of approximately $12 million should be largely offset by cash receipts of approximately $85 million from the sale of non-core operations and facilities; and streamlined operations should deliver pretax savings of approximately $35 million annually in 2007 and thereafter.
York says consolidating operations within the EMEA region enables it to achieve its "one York" goal of a pan-European business profile, deliver more comprehensive solutions and services to its customers and reduce inefficiencies associated with its current structure.
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