ATS adjusts North American ASG capacity as next step in improvement program
TSX: ATA
CAMBRIDGE, ON, Jan. 10 /CNW/ - ATS Automation Tooling Systems Inc. today
announced it is reducing its Automation Systems Group (ASG) workforce in North
America as part of an aggressive ongoing improvement program to strengthen
performance and improve global market positioning.
The rationalization will reduce ASG employment by approximately 180 in
North America (7% of the ASG global workforce), with approximately 100
positions impacted in Cambridge, Ontario. As a result, estimated severance and
related costs of approximately $5 million are expected to be expensed during
the fourth quarter of fiscal 2007 (three months ended March 31, 2007). The
workforce rationalization is expected to decrease ATS's annualized payroll
costs by an estimated $11 million pre-tax.
"The decision to further streamline our operations and reduce the costs
of underutilized capacity was arrived at carefully, giving full consideration
to our strategic roadmap, our long-term prospects and the need to reallocate
resources to high opportunity markets," said Jim Sheldon, President ASG North
America. "As a result, we are confident that this move, combined with other
cost savings and process improvements already implemented, will make ASG North
America a stronger, more competitive business, which is better able to achieve
our customer and shareholder goals."
ATS implemented its long-term strategic roadmap in the fall of 2005 and
has made substantial operational headway since by:
- investing in new people, equipment, facilities and infrastructure in
China and South East Asia
- divesting or closing five under-performing or non-strategic
operations in North America and Europe
- reducing costs through aggressive supply chain management and value
engineering to improve profitability and combat foreign exchange
pressures
- implementing North American organizational restructuring
- employing comprehensive new global brand operational standards and
sales processes
- growing Repetitive Equipment Manufacturing and other capabilities to
serve healthcare markets
"The actions we've taken today are necessary to help us further improve
overall performance as we address the significant negative impact of foreign
exchange, continuing restructuring in North American automotive markets and
migration of manufacturing to offshore markets," said Ron Jutras, ATS
President and CEO. "As a global company, we are committed to enhancing our
ability to serve the needs of our customers in North America and abroad and to
generating improved investment returns for ATS shareholders."
About ATS
ATS Automation Tooling Systems Inc. provides innovative, custom designed,
built and installed manufacturing solutions to many of the world's most
successful companies. Founded in 1978, ATS uses its industry-leading knowledge
and global capabilities to serve the sophisticated automation systems' needs
of multinational customers in healthcare, computer/electronics, automotive and
consumer products. Through its solar business, ATS participates in the
rapidly-growing solar energy industry. It also leverages its many years of
repetitive manufacturing experience and skills to produce, in high volume,
precision components and subassemblies and to answer the specialized
repetitive equipment manufacturing requirements of customers. ATS employs
approximately 3,600 people at 26 manufacturing facilities in Canada, the
United States, Europe, southeast Asia and China. The Company's shares are
traded on the Toronto Stock Exchange under the symbol ATA. Visit the Company's
website at www.atsautomation.com.
Note to Readers
This press release contains certain statements that constitute
forward-looking information within the meaning of applicable securities laws
("forward-looking statements"). Such forward-looking statements involve known
and unknown risks, uncertainties and other factors that may cause the actual
results, performance or achievements of ATS, or developments in ATS's business
or in its industry, to differ materially from the anticipated results,
performance, achievements or developments expressed or implied by such
forward-looking statements. Forward-looking statements include all disclosure
regarding possible events, conditions or results of operations that is based
on assumptions about future economic conditions and courses of action.
Forward-looking statements may also include, without limitation, any statement
relating to future events, conditions or circumstances. ATS cautions you not
to place undue reliance upon any such forward-looking statements, which speak
only as of the date they are made. Forward-looking statements relate to, among
other things, a reduction in workforce and the estimated savings and severance
costs related thereto; management's belief as to the positive impacts that the
workforce reduction and other initiatives will bring about. The risks and
uncertainties that may affect forward-looking statements include, among
others, higher than expected severance costs, negative reaction from ATS
customers, the failure of improvement initiatives to bring about expected
benefits, and other risks detailed from time to time in ATS's filings with
Canadian provincial securities regulators, including ATS's Annual Report and
Annual Information Form for the fiscal year ended March 31, 2006.
Forward-looking statements are based on management's current plans, estimates,
projections, beliefs and opinions, and ATS does not undertake any obligation
to update forward-looking statements should assumptions related to these
plans, estimates, projections, beliefs and opinions change.
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For further information: Carl Galloway, Vice President and Treasurer; Gerry Beard, Vice President and Chief Financial Officer, (519) 653-6500