BF Goodrich Consolidates Landing Gear Unit (Dec. 17)
CHARLOTTE, N.C.---The BFGoodrich Company has completed its plan for consolidating the company's landing gear equipment business following the merger last July with Coltec Industries. Under the plan, the overall business structure will be optimized around major market segments; significant cost savings and productivity gains will be realized through renegotiated union contracts; one facility will be completely closed; and a major manufacturing facility in Euless, Texas will be partially closed. While the company would prefer to operate the Texas site as an advanced machining center, it could close this location completely depending on discussions with the union.
In commenting on today's announcement, Marshall Larsen, President of BFGoodrich Aerospace, said, "Our plan will enable BFGoodrich to cement its position as the global leader in designing and manufacturing advanced landing gear systems for every segment of the aerospace industry. Not only will the restructured organization contribute significantly to achieving our merger cost reduction goals; it will help us to better serve customers and strengthen our business for the future.'' He added, "The plan maximizes the utilization of resources, enhances our ability to achieve operational improvement targets, and preserves our capacity to respond quickly and effectively to marketplace changes.''
Under the company's consolidation plan, the overall business structure will be optimized around the major market segments -- commercial transport, regional and business, and military. Major manufacturing sites would continue at Oakville, Ontario, as well as Cleveland, Ohio and Tullahoma, Tennessee, where recently renegotiated labor contracts will reduce costs and raise productivity substantially. Finished parts and sub-assemblies will be supplied to final assembly operations in Seattle, Oakville and Cleveland. If discussions with the union at the Texas facility result in a new agreement with terms and conditions similar to those at other BFG landing gear locations, the Euless site would remain open as an advanced machining center.
The landing gear consolidation plan will generate the majority of the $35 million in annual operational consolidation savings the company estimated it would achieve when the Coltec merger was announced. With that plan now complete, BFGoodrich is confident that its operational consolidations will generate in excess of the $35 million estimate beginning in 2002.
In addition, the company has taken the necessary actions to achieve the $25 million in annual savings associated with post-merger headquarters consolidation and will see the full savings in 2000.
The company will take a special charge in the current quarter related to the consolidation of the landing gear equipment business. Most of the charge, which assumes a partial closure of the Texas site, reflects severance costs associated with reducing current employment from approximately 2,100 to 1,600 positions. This charge is included in the discussion of merger-related and consolidation costs in the company's third-quarter 10-Q filing.
With annual sales approaching $6 billion, BFGoodrich has leading business positions in advanced aerospace systems, performance materials, and engineered industrial products. The company, which was recently ranked by Fortune magazine on the global top ten list of most highly regarded aerospace suppliers, has its headquarters in Charlotte, North Carolina, and employs 27,000 people worldwide. With sales approaching $3.7 billion, BFGoodrich Aerospace is one of the world's leading suppliers of components and systems to the aerospace industry.
BFGoodrich Adopts New Structure to Consolidate Landing Gear Business