Bankrupt automotive and truck component supplier Federal-Mogul Corp. is initiating a three-year restructuring plan to return its various businesses to greater levels of profitability. The company noted that its restructuring could affect about 25 facilities and reduce its workforce 10% by December 2008, though the firm cautioned that details of the restructuring plan have not yet been finalized.
Southfield, MI-based Federal Mogul expects to take charges of between $125 million to $150 million against earnings for costs and expenses related to this restructuring plan in the current quarter and future periods, it said. Costs likely to be incurred are those for employee severance, retention, and benefits expenses, along with the impairment of facilities and equipment.
“Our focus for the future will be on improving our performance in mature markets and expanding in key growth markets to be better positioned to serve our customers,” said Federal Mogul’s chairman, president & CEO Jose Maria Alapont. “While these decisions are difficult, our drive for global profitable growth is dependent on implementing strategies that continue to strengthen our competitiveness and profitability in this market environment.”
He noted that Federal-Mogul continues to make significant advancement toward emergence from Chapter 11 in the both the U.S. and in Great Britain.