Federal-Mogul announces restructuring plan

Southfield, Michigan--Automotive components supplier Federal-Mogul Corp.--which filed for Chapter 11 bankruptcy protection more than four years ago--has announced a three-year restructuring plan which could affect about 25 facilities and reduce the company's work force by about 10 percent by December 2008.

Details of the plan have not been finalised, but it is part of Federal-Mogul's global profitable growth strategy designed to satisfy customer and market expectations while improving corporate performance and expanding in key growth markets, the company said.

The company anticipates recording charges for costs and expenses related to the restructuring plan in the current quarter and future periods. Costs likely to be incurred generally are expected to include some severance costs, retention costs, benefits costs and impairment of the facilities and equipment involved, with preliminary cost estimates ranging from $125 million to $150 million.

"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 with our leading technology and world-class portfolio of quality products and services," said Jose Maria Alapont, Federal-Mogul chairman, president and ceo.

"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."

During the fourth quarter of 2005, Federal-Mogul continued to make significant advancement toward emergence from Chapter 11 in the US and administration in the United Kingdom, the company said. The firm filed for both on 1 Oct. 2001.

"We are pleased with the progress in our emergence proceedings and implementation of our global profitable growth strategy as we continue to develop best cost manufacturing, service and engineering operations," Alapont said.

From Rubber & Plastics News (A Crain publication)

Press release from Federal-Mogul