ROCKWELL TO SPIN OFF BUSINESS.Byline: Michael White There are multiple public figures named Michael White or Mike White, including:
Associated Press (AP) Cooperative news agency, the oldest and largest in the U.S. and long the largest in the world. Rockwell International Rockwell International was the ultimate incarnation of a series of companies under the sphere of influence of Willard Rockwell, who had made his fortune after the invention and successful launch of a new bearing system for truck axles in 1919. Corp. will spin off its semiconductor business to shareholders and cut 3,800 jobs in a major restructuring of the automation and avionics businesses that will remain after the split. The reorganization announced Monday will include a $625 million charge, including about $200 million in cash to cover severance pay Severance Pay Compensation that an employer gives to someone who is about to lose their job. Notes: Severance pay is not always paid to employees. It depends on the situation in which the employee is losing their job and whether legislation requires severance to be paid. and other costs related to job elimination. ``We must slim down Verb 1. slim down - take off weight lose weight, melt off, slim, slenderize, thin, reduce sweat off - lose weight by sweating; "I sweated off 3 pounds in the sauna" to stay competitive in a very competitive world. And as we implement this resizing, the next step will be to change the way we run the company to ensure that our business structure provides us with a competitive advantage,'' Chairman Don H. Davis said. In a letter to shareholders, Davis said the transaction, subject to Internal Revenue Service ruling as a tax-free distribution, was being taken to improve the consistency of its earnings and reposition itself for future global growth. The changes result from several factors, including the Asian financial crisis and falling prices for personal computer modems, Davis said in an interview. ``The dynamics of that (semiconductor) business are very different than the other two businesses that are ongoing at Rockwell. It has greater volatility to it. It has greater requirements for investments. It has great upside potential Upside potential The amount by which analysts or investors expect the price of a security may increase. upside potential The potential price or gain that may be expected in a security or in a security average, generally stated as the dollar as well,'' he said. ``We thought that it would serve out shareholders, our people, our customers, to spin it off as a separately traded, stand-alone business.'' Newport Beach-based Semiconductor Systems, with $1.3 billion in sales expected this year, employs about 7,000 people. Semiconductor President Dwight W. Decker will become president of the new company. About 2,500 employees are in Newport Beach, with the rest spread out in San Diego; El Paso, Texas; Colorado Springs, Colo.; and Mexicali, Mexico. The transaction was expected to be completed at the end of the year. Shareholders will receive shares in the new company on a pro rata [Latin, Proportionately.] A phrase that describes a division made according to a certain rate, percentage, or share. In a Bankruptcy case, when the debtor is insolvent, creditors generally agree to accept a pro rata share of what is owed to them. basis. The company will seek to expand both businesses through acquisitions, Davis said. He declined to discuss any specific deals the company might be considering. Increased competition and generally stagnant prices have put pressure on companies to reduce costs, said Anthony Ginsberg, an analyst with Fourteen Research in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of . ``No one's getting price increases these days on anything. I think that's the key thing. There's no inflation anymore, or very little, and if you're going to compete, and your volume isn't growing, then you've got to cut cost,'' he said. Job cuts will focus primarily on the industrial automation division, where 3,000 positions will be eliminated. Another 720 will be cut from the avionics business, Rockwell Collins, based in Cedar Rapids, Iowa. Another 80 jobs will be cut from the company's Costa Mesa headquarters. Rockwell also said in a third-quarter earnings advisory that it expects sales for continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the , excluding Semiconductor Systems, will be about $1.7 billion, up approximately 5 percent over last year's third quarter. Earnings, however, were expected to be 45 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , approximately 20 percent below 1997's third quarter results of 56 cents. Earnings will be pushed down by a $35 million government program charge at Avionics, he said. Automation's third quarter results were expected to drop about 10 percent below the third quarter of 1997. CAPTION(S): Photo PHOTO Don H. Davis Says firm must slim down |
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