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Home > BizTimes Daily > Archives > October 1, 2008
Modine to cut managerial staff at Racine headquarters
Published October 1, 2008 - BizTimes Daily
Modine Manufacturing Co. announced today its restructuring will continue with the elimination of 15 percent of its managerial workforce at its Racine headquarters.
The struggling firm said the elimination of 20 full-time positions will and reduction of post-retirement benefits will result in annualized savings of approximately $3.3 million.
Bradley Richardson, executive vice president and corporate strategy and chief financial officer, said, "As we look to the future, Modine has established performance targets including selling, general and administrative expenses (SG&A) at 11.5 percent of total sales, which is part of our overall framework to achieve an 11 to 12 percent return on capital employed. In order to achieve these objectives and provide Modine the financial strength and cash flow to support our current growth strategy, we continue to take difficult, but necessary, actions, such as those being announced today. As we do so, we remain focused on our core thermal management expertise and the delivery of value to our customers and shareholders."
The workforce reduction, combined with recent executive retirements, will result in an estimated $2.5 million charge for severance and retirement benefits in the company's second fiscal quarter ending Sept. 30.
"We continue to execute our four-point plan, which includes manufacturing realignment, portfolio rationalization, SG&A reduction and increased capital allocation discipline," said Thomas Burke, president and chief executive officer of Modine. "As we drive continuous improvement in our bottom line performance, we continue to invest in technological differentiation and the development of advantaged product and market positions which capitalize on global demand for emissions reduction, fuel economy, high efficiency performance and clean sources of alternative energy. We are confident we are on the right course to build a stronger, more competitive company that can better serve our customers, employees and shareholders in the years to come."
Modine specializes in thermal management systems and components, bringing highly engineered heating and cooling technology and solutions to diversified global markets.
