Tenneco is to axe 1,100 jobs worldwide as it attempts to cut costs and capacity in response to the worsening auto industry downturn.
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The supplier said yesterday (29 October) that, as well as the job cuts, it intends to close five facilities and implement other cost reduction actions which it hopes will generate about US$64m in annual savings once fully implemented.
The company said it intends to close four North America manufacturing facilities, restructure another manufacturing plant there and close its Dunsborough, Australia, engineering operation.
The combination of these closures and other operational and administrative restructuring actions across its global operations will eliminate approximately 500 salaried positions and 600 hourly positions.
Tenneco said it estimates that it will record up to US$60m in charges – approximately $44m in cash – related to the restructuring initiatives, $25m of which it expects to record in the fourth quarter and the remainder by the end of 2009.
The actions are additional to regional restructuring programmes initiated earlier in 2008, which have eliminated more than 1,150 positions worldwide.
“The current global economic crisis and dramatically falling consumer demand for vehicles around the world are accelerating a downward shift in build rates in most regions globally,” said chairman and CEO Gregg Sherrill. “We sincerely regret the impact of these restructuring actions on our employees, but we must act quickly by better aligning our operations with the new realities of the market.”
The North America manufacturing plants recommended for closure include the company’s Milan, Ohio elastomer facility and its Evansville original equipment (OE) emission control just-in-time facility.
The company also expects to close an OE ride control plant and another OE emission control just-in-time facility in the US, as well as restructure a North America OE emission control plant.
Locations will be announced soon.
“All of these actions are designed to position Tenneco to weather the current economic storm and capitalise on opportunities when the industry and global economies begin to recover,” Sherrill said. “Tenneco has a strong track record over the last nine years of responding successfully to difficult operating conditions, and I am confident we will once again execute on our plans and emerge a stronger, more profitable company.”
