By Liz White, ERJ staff
Lake Forest, Illiniois-Tenneco Automotive aims to save $20 million (Euro 16 million) a year by cutting up to 250 of its middle and senior management (about six percent of the total). The move is part of restructuring aimed, among other things, at dealing with the effects of high raw material prices, said Mark Frissora, chairman and ceo, in a 28 Oct statement.
Tenneco will also consolidate its Australia/New Zealand operations with those in Asia to create a new Asia-Pacific business unit, reducing the number of strategic business units to six.
"We regret the impact this action will have on our employees," said Frissora, adding, "The reality of volatile market conditions makes this move imperative. The decision to reduce our workforce, while difficult, is the right step to help maximise our potential for success with a lower cost structure and more efficient operations."
The aim is to reduce Tenneco Automotive's selling, general, administrative and engineering expense and improve its gross margin, in â€œthe face of challenging industry conditions, including rising raw material costs,â€ the company's statement added.
Tenneco aims to complete the changes by the end of March 2005, saving some $20 million a year, with charges for the restructuring of $20 to $24 million over the next two quarters.
Tenneco, a $3800-million turnover automotive supplier, recently expanded manufacture of its elastomer vibration-control and suspension products into Europe, adding a facility for moulding these parts at its plant in Ermua in northern Spain.