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GTE TO IMPLEMENT COMPREHENSIVE RE-ENGINEERING PROGRAM; WILL RESULT IN 4TH-QUARTER AFTER-TAX RESTRUCTURING CHARGE OF APPROXIMATELY $1.2 BILLION

 STAMFORD, Conn., Jan. 13 /PRNewswire/ -- GTE (NYSE: GTE) today announced that it will implement an aggressive plan to dramatically improve customer service and streamline its Telephone Operations. This program, along with a repositioning of its satellite-communications assets, will result in a fourth-quarter 1993 pre-tax non-recurring restructuring charge of approximately $1.8 billion, which will reduce net income by $1.2 billion, or $1.22 per share. Excluding the charge, 1993 earnings are expected to be in line with analysts' estimates.
 The re-engineering plan will be implemented at a pre-tax cost of $1.3 billion over the next three years, with expected reductions of approximately 17,000 Telephone Operations employees during that time frame. When completed, the expected annual savings from re-engineering will be approximately $1 billion.
 "This plan will revolutionize customer service at Telephone Operations," said GTE Chairman and Chief Executive Officer Charles R. Lee. "It reflects our intention to provide the best customer service in the industry, and is a critical part of our strategy to position GTE for the emerging opportunities in telecommunications. With our 17 million telephone access lines and 52 million mobile-cellular 'POPs' already reaching over 30 percent of the U.S. population, the plan announced today will further enhance our competitive position," Lee said.
 Major Re-engineering Actions Are Detailed
 "GTE began its process re-engineering initiative in 1992, and has involved hundreds of employees whose participation has been invaluable in research, planning and conducting pilot programs involving every aspect of the company's service-delivery process," said Kent B. Foster, GTE vice chairman and president - Telephone Operations.
 The $1.3 billion charge represents the price tag of completing the initiative and includes $680 million to upgrade or replace many existing customer service and administrative systems as well as enhance network software. An additional $160 million has been provided for the estimated costs of consolidation of facilities and operations. When completed, customer contact centers will be reduced from 171 to 11; revenue collection centers from 5 to 1; and, the 19 regional centers required to monitor and manage GTE's national network of 17 million access lines will be reduced to just one center. The charge also includes $410 million to cover employee-separation costs and $50 million for employee retraining.
 "The investment in customer service will make GTE easier to do business with than any other telecommunications company," Foster stated. Among the many changes from which GTE customers will benefit, are:
 Easy Access: The many 800 numbers to reach GTE around the country will be reduced to just a few 800 numbers to meet virtually any customer need. Interactive voice response units will be installed to quickly route customers to the appropriate service representative, who will have the training and the instant access to information to handle 70-80 percent of all customer requests on the spot.
 Business Express: Sales representatives will be equipped with access to advanced central systems. This will allow them to design and price customer-specific networks right in the customer's office, as well as print out a contract and enter the order for immediate processing -- all on site.
 Express Dialtone: Customers moving into a new home need only plug their phone into the wall jack and hit any button to reach GTE. Within minutes, service can be activated, a phone number assigned and customer- calling features installed. No visit by a service person is necessary.
 Touch and Go: Interactive computers will make it possible for customers to learn their account balances, pay their bills, set up payment arrangements and order and activate new services -- all by the use of their telephone key pad.
 Among other improvements re-engineering will make possible, the number of customer requests satisfied during the first call will increase from less than 50 percent to over 80 percent, while the number of repairs accomplished while the customer is still on the phone will go from less than one percent to 70 percent.
 "Additionally, customer-service problems will be cut in half and new services will be introduced six times faster," said Foster. "That's good news for our customers, and rewarding news for our shareholders."
 "While we recognize the pain and disruption this program will cause our people," Lee said, "implementation is critical to the future of our company. The $410 million we have set aside will assist the affected employees in making the necessary transition in their careers. The new training programs associated with our re-engineered systems will be an integral part of career development for employees remaining with GTE."
 Spacenet Combined With Government Systems
 As part of today's announcement, GTE also said that it would combine its Spacenet business with Government Systems. "This reflects the similarities in business skills utilized, as well as their participation in many of the same markets," noted Lee. Concurrent with this decision, GTE recorded a reduction in the carrying value of its satellite- communications assets.
 GTE is Well Positioned for Profitable Growth
 "The actions announced today are the logical next steps in the strategic program we have undertaken to focus GTE solely on telecommunications and continue to improve our competitive position," said Lee. "Implementation of our re-engineering plan for Telephone Operations and the Spacenet consolidation, along with our recently announced senior-management restructuring, will enable us to put into place a streamlined, customer-focused business that will ensure profitable growth into the 21st century. Moreover, these moves will position us to accelerate delivery of a full array of voice, video and data services. Together with our ongoing advances in new wireless services, GTE will be well positioned to provide the most advanced telecommunications services available," said Lee.
 GTE is the largest U.S.-based local telephone company, the second-largest cellular-service provider in the United States and the fourth-largest publicly owned telecommunications company in the world. GTE also is a leader in government and defense communications systems and equipment, aircraft-passenger telecommunications, directories and telecommunications-based information services and systems.
 -0- 1/13/94
 /CONTACT: In Washington, D.C., Julia Spicer, 202-463-5206 (After 6 p.m., 202-797-0715), or Harvey W. Greisman, 203-965-2903 (After 6 p.m., 203-226-7661), or Tony Hamilton, 203-965-2853 (After 6 p.m., 203-327-2162), all of GTE/
 (GTE)


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PS -- NY047 -- 1046 01/13/94 11:38 EST
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Publication:PR Newswire
Date:Jan 13, 1994
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