11 March 1999: US-based Donnelly Corp., a manufacturer of rearview mirrors, said it is embarking on a sweeping restructuring plan to shore up its European operations, triggering a US$ 8.6 million char…
11 March 1999: US-based Donnelly Corp., a manufacturer of rearview mirrors, said it is embarking on a sweeping restructuring plan to shore up its European operations, triggering a US$ 8.6 million charge in the third quarter that will be largely offset by other gains. “We are taking the right steps to bring our European operations up to acceptable levels of performance,” said Dwane Baumgardner, chairman and chief executive officer, in a statement. “Everyone in our organization knows that we have a long and difficult challenge before us; we know it will take time.” Donnelly said the US$ 8.6 million pre-tax charge would cover the costs of implementing the plan. The company said, however, the charge will be largely offset by other one-time gains in its fiscal 1999 third-quarter, which ends in March. The gains are primarily the result of the sale of Donnelly“s equity in Vision Group PLC, Edinburgh, Scotland. Under the plan, Donnelly said it would slash roughly 150 to 200 production and overhead jobs, or about 8% of its European staff, during the next 12 to 18 months. The company added it would renegotiate existing labour contracts to stem the growth in labour costs and obtain more flexible work practices. Donnelly, which also makes windows, door handles and interior trim for cars, said it would meld two major German production facilities into one location. The company said it would also speed implementation of leaner manufacturing processes throughout Europe. The company said the turnaround will primarily affect its European corporate staff and automotive mirror manufacturing operations in Ireland and Germany. Baumgardner said he was confident the plan would be successful.