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Lear Corporation posts Q3 financial results

03
Nov '08
Operating Improvement Plan
The Company recently announced a $150 million operating improvement plan to strengthen operating results and increase financial flexibility over the next twelve months. This initiative is comprised of actions to further reduce structural costs and other measures intended to preserve financial flexibility. Specific actions include:

-- Reducing program development costs, consistent with the significantly lower production outlook
-- Acceleration of low-cost engineering and sourcing initiatives
-- More targeted investments in growth initiatives, focused on high priority programs
-- Further reductions in procurement, manufacturing, engineering and logistics costs to reflect present business conditions
-- Further census reductions, temporary layoffs and additional thrifting of personnel-related costs
-- Re-timing and selective reductions in restructuring spending
-- Aggressive working capital management and capital spending efficiencies
-- Other commercial actions and supply base consolidation

Rossiter continued, "We have faced challenging conditions before, and each time, we have emerged as an even stronger company. Going forward, we intend to focus on those things within our control, including further improvements to our cost structure, maintain our focus on strategic priorities and do whatever it takes to position the Company for future success. We are committed to weathering the downturn and emerging as an even stronger competitor when the headwinds subside."

Lear continues to make progress on its strategic priorities, including the global restructuring initiative, further growth and diversification of its global sales and the longer-term growth and business improvement plan for the electrical and electronic segment. The Company intends to maintain its commitment to these strategic priorities, notwithstanding adverse business conditions.

For the first nine months of 2008, approximately two-thirds of Lear's net sales were generated outside of North America. In addition, Lear continues to win new business globally and has been awarded over $700 million in net new business since January, with more than half in the electrical and electronic segment.

Liquidity Position
Lear's cash position and access to liquidity remain strong, and the Company has no near-term debt maturities. In addition, the Company expects to generate positive free cash flow in the fourth quarter and for the full year of 2008. The Company's primary liquidity sources are:

-- Cash and cash equivalents (at 09/27/08) $ 523 million
-- Revolving credit facility $ 1.3 billion

At September 27, 2008, there were no borrowings under the Company's revolving credit facility. In October, Lear elected to borrow $400 million under its revolving credit facility to protect against possible short-term disruptions in the credit markets.These funds have been temporarily invested in safe, short-term investments.

"We remain focused on maintaining ample financial flexibility. Our global restructuring actions, together with the recently announced operating improvement plan, are designed to respond to the sharply lower industry production levels we are experiencing. The Company will continue to closely monitor overall business conditions and industry production levels. We will implement necessary additional actions in response to any further industry weakness," Rossiter concluded.

Lear Corporation


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