Interviews
Lean Six Sigma to remove costs from LYDALL
04 May '09
5 min read
Our Lean Six Sigma program continues to generate productivity gains and remove costs from the organization. We expect Lean Six Sigma will also assist the Company in reducing its working capital, particularly our inventory levels, resulting in improved cash generation as we moveforward in 2009.
“We continued cost reductions in the first quarter of 2009, including a further reduction in our global workforce by approximately 7.5%, primarily from headcount reductions at the Company's Thermal/Acoustical global automotive operations. We also made the difficult decision to reduce the annual base salaries by 3% of all executive officers and most domestic salaried employees of the Company and its subsidiaries, effective as of March 16, 2009. In addition, the Company's matching contributions to its sponsored 401(k) plan will be suspended, beginning with the first payroll of May 2009, for all non-union, domestic employees.
“In our North American automotive business, we were invited by Chrysler and General Motors to participate in the U.S. Department of Treasury Auto Supplier Support Program. The intent of the Program is to provide suppliers of the U.S. automotive industry with access to governmentsupported protection for qualified accounts receivable from domestic automakers participating in the Program. We have completed the necessary documentation to request participation in the Program with both Chrysler and General Motors and are waiting to be accepted into the Program.
“Also in our North American automotive business, we continue to accelerate the North American automotive consolidation, and now expect it to be substantially complete during the second quarter of 2009, which will allow the Company to begin to realize savings from the consolidation earlier than previously anticipated. We expect annualized savings of approximately $3.5 million to $4.0 million from the consolidation.
In addition, we now expect restructuring expenses over the consolidation period to be approximately $7.0 million, a reduction of $0.4 million from our previous estimate. We are also aggressively working with our customers to quote on platforms that are being transferred from competitors due to this challenging economic environment and have started to be awarded some platforms.
“While we cannot predict when global economic conditions will improve, we believe that the Company is positioning itself well to be stronger operationally when conditions improve in the markets that we serve.”
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“We continued cost reductions in the first quarter of 2009, including a further reduction in our global workforce by approximately 7.5%, primarily from headcount reductions at the Company's Thermal/Acoustical global automotive operations. We also made the difficult decision to reduce the annual base salaries by 3% of all executive officers and most domestic salaried employees of the Company and its subsidiaries, effective as of March 16, 2009. In addition, the Company's matching contributions to its sponsored 401(k) plan will be suspended, beginning with the first payroll of May 2009, for all non-union, domestic employees.
“In our North American automotive business, we were invited by Chrysler and General Motors to participate in the U.S. Department of Treasury Auto Supplier Support Program. The intent of the Program is to provide suppliers of the U.S. automotive industry with access to governmentsupported protection for qualified accounts receivable from domestic automakers participating in the Program. We have completed the necessary documentation to request participation in the Program with both Chrysler and General Motors and are waiting to be accepted into the Program.
“Also in our North American automotive business, we continue to accelerate the North American automotive consolidation, and now expect it to be substantially complete during the second quarter of 2009, which will allow the Company to begin to realize savings from the consolidation earlier than previously anticipated. We expect annualized savings of approximately $3.5 million to $4.0 million from the consolidation.
In addition, we now expect restructuring expenses over the consolidation period to be approximately $7.0 million, a reduction of $0.4 million from our previous estimate. We are also aggressively working with our customers to quote on platforms that are being transferred from competitors due to this challenging economic environment and have started to be awarded some platforms.
“While we cannot predict when global economic conditions will improve, we believe that the Company is positioning itself well to be stronger operationally when conditions improve in the markets that we serve.”
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LYDALL INC
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