Tenneco Embarks on Restructuring Programme
Tenneco Automotive has announced that it will cut up to 250 salaried positions, about six per cent of its workforce. The majority of the job losses will come from the middle and senior management levels and will be cut from the company’s worldwide workforce. Tenneco describes the redundancies as part of its “global restructuring” programme, which also includes plans to reduce the number of strategic business units to six. The company says this will mean consolidating its Australia/New Zealand business with its Asia operations to create a new Asia-Pacific business unit.
Explaining the reasons for restructuring, Tenneco explains that it is: “taking action to strengthen its competitiveness and sustain turnaround efforts in the face of challenging industry conditions, including rising raw material costs.”
“We regret the impact this action will have on our employees,” said Mark P. Frissora, chairman and CEO, Tenneco Automotive. “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.”
According to the company, the new Asia-Pacific business unit will also include the company’s operations in China, Japan, India, Thailand and Singapore, as well as its Japanese original equipment business worldwide. The company says that Timothy Donovan, executive vice president, will lead the Asia Pacific business unit. Prior to the reshuffle, Mr Donovan was managing director of the International Group, which included the company’s operations in South America and Asia. Alex Drysdale, currently managing director for the Australia/New Zealand business unit, is resigning to pursue other interests.
Don Miller, currently vice president and general manager of the European aftermarket, will take on a new role of establishing and developing the company’s aftermarket business in China. As a result, the European aftermarket sales and marketing organisation will report directly to Hari Nair, executive vice president and managing director of Tenneco Automotive Europe. The company’s South American operations, which had been part of the company’s International business unit, will now be moved under the company’s European operations and managed by Hari Nair as well.
Tenneco Automotive’s management believes that the cost reduction plan will be completed by the end of the first quarter of 2005 and will generate approximately $20 million in annual savings when completed.