Exide Corporation (NYSE: EX), the global leader in stored electrical energy solutions, today announced initial steps to improve the profitability of its North American transportation aftermarket business, which is estimated to result in annual savings of approximately $24 million.
These actions are also being undertaken in conjunction with the company’s pending acquisition of GNB Technologies – expected to close at the end of September 2000. Of the $24 million in savings, approximately $20 million of the savings from this program will be an addition to the first year savings resulting from the acquisition, estimated at $44 million.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The company’s actions to improve profitability include moves to streamline its North American sales and marketing organizations and programs, rationalize its distribution operations and lower production costs through reduction of manufacturing capacity.
Robert A. Lutz, Chairman and Chief Executive Officer at Exide, said,
“These actions are part of our aggressive plan to refocus Exide by
strengthening our existing business and to immediately improve profitability and cash flow. We will be taking similar types of actions following the GNB acquisition.”
Management said the initial actions will result in related charges in the company’s second quarter, ending October 1, 2000, of approximately $17 million on both a pre-tax and after-tax basis of which approximately $5 million will be in cash.
The profit improvement actions include:
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData— The United States and Canadian aftermarket sales organizations will be merged into a North American sales group. This reorganization will result in annual savings of approximately $3 million.
— Exide will shift the focus of its motorsports programs to an associate sponsorship of the Roush Racing Team while retaining the company’s association with NASCAR. Total savings will be approximately $15 million annually, beginning in October 2000.
— The company will close 11 of its North American distribution facilities within the next 30 days, resulting in annual savings of approximately $2 million.
— Exide’s automotive aftermarket manufacturing facility in Maple, Ontario will be closed by November 30, 2000. This action will generate approximately $4 million in annual pre-tax savings. The company will undertake a feasibility study regarding the conversion of the facility to the manufacture of high-quality industrial batteries, consistent with its entry into the North American industrial market following the GNB acquisition.
