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ITT AUTOMOTIVE REALIGNMENT DEFINES NEW SUPPLIER GENERATION

 AUBURN HILLS, Mich., June 8 /PRNewswire/ -- "The steps ITT Automotive is taking to position itself as a leading global systems supplier will create a leaner, more responsive environment which encourages innovation, cooperation and communication among worldwide management disciplines and operating units."
 Timothy D. Leuliette, president and CEO, outlined these objectives in describing an organizational realignment taking place within ITT Automotive.
 "These actions are being taken in response to a major shakeout of automotive suppliers which will occur over the next five to eight years. This shakeout will trim the Tier One supplier ranks to fewer than 50 of the strongest and best positioned global automotive systems suppliers," he said.
 "To survive in this environment, companies like ITT Automotive must be globally positioned, low-cost system producers, able to engineer and supply components and systems to customers anywhere in the world," said Leuliette.
 "They must be entrepreneurial, technological leaders, financially strong, consistently meet world-class standards for quality, on-time delivery and low cost, and be able to operate as full partners to the automakers of the world," he continued.
 While ITT Automotive is, today, a global Tier One supplier, Leuliette observed, the realignment will streamline and strengthen the organization and its capabilities in anticipation of future industry demands.
 The realignment has two important goals:
 1. Manage all product lines on a worldwide basis for faster, more effective response to customer needs and demands.
 2. Create global team relationships among product lines, people, suppliers and customers for designing, engineering and producing total vehicle systems.
 Global Organization
 The organization of ITT Automotive is being changed from a collection of individual companies which essentially operated independently of each other with little interaction. The new organizational structure emphasizes interrelationships among product lines and the business and technical disciplines. It is designed to enhance ITT Automotive's ability to develop and produce systems for global customers, while improving support for regional markets.
 All operations are being consolidated in three major sectors. All of the original equipment operations will be organized administratively according to geographic location -- ITT Automotive North America and ITT Automotive Europe -- and all worldwide aftermarket operations will continue to be organized as ITT Automotive Aftermarket. Activities in Asia are being reinforced at the same time.
 The presidents of these operations -- Thomas Walker, ITT Automotive North America; Dr. Klaus Lederer, ITT Automotive Europe; and Richard Lorraine, ITT Automotive Aftermarket -- will meet regularly with Leuliette and C.S. (Bud) Kulesza, senior vice president and controller, as an executive committee to assure close coordination of all worldwide operations and customer programs.
 Worldwide Coordination
 All research, development, engineering, purchasing, manufacturing, testing and marketing activities will be coordinated worldwide through "Centers of Expertise" for each of the major product lines.
 -- Brake systems, including ABS, actuation and foundation brakes;
 -- Electrical systems, including electric motors, wipers, switches and lamps;
 -- Fluid handling, including tubing, superclusters and quick connects;
 -- Structural systems, including seat sub-systems, structural stampings, body hardware and door hinges;
 -- Precision die casting;
 -- Aftermarket North America, which includes Aimco brake components, Koni shock absorbers, ITT Automotive SWF wiper blades and ITT Automotive Teves brake components; and,
 -- Aftermarket Europe, which includes Ate brake components and brake fluids, as well as Koni shock absorbers and ITT Automotive SWF wiper blades and ITT Automotive Teves brake components.
 The centers for brake systems and electrical systems are in Europe, while the centers for structural systems, fluid handling and precision die casting have been established in North America. North American operations for brakes systems and electrical systems will be under the direction of general managers who will coordinate their activities with the Centers of Expertise for those disciplines in Europe.
 Two major technology centers also have been established, one in North America and one in Europe, which work closely together in developing and refining products and developing new products. The North American Technology Center is part of the ITT Automotive World Headquarters in Auburn Hills, Mich., U.S.A., which supports all product lines. In Europe, much of the research and development work on braking systems, electrical motors, switches and lamps will be focused at the technology center in Frankfurt, Germany.
 Regional Sales and Marketing
 Regional sales and marketing organizations have been consolidated into regional organizations in Europe, North America and Asia.
 "Establishing these regional operations will vastly improve ITT Automotive's ability to respond quickly and effectively to customer needs," said Leuliette. "Program managers will be assigned to focus on individual customers, and these managers will work in close coordination with other ITT Automotive product line managers serving that same customer so a total systems approach can be pursued," he explained.
 "A critical part of our strategy will be strengthening the ability of the brake systems and electrical systems organizations to respond to their customers in the demanding and highly competitive North American markets," Leuliette observed.
 "We will do this by providing more resources to individual customer teams, concentrating the attention of these teams on individual customers, and by giving them increased decision-making responsibilities in order to speed response times," added the ITT Automotive CEO.
 Staff Consolidation
 All major staff functions in both Europe and North America are being consolidated to eliminate the duplication and inefficiency of having the same functions in all business operations.
 Finance, information systems, operations, administration, legal, corporate and industry relations, business development, purchasing and quality will be centralized with staffs in both Europe and North America to service the operations in those regions.
 'World-Class' Business Standards
 "To be certain ITT Automotive operations are the best in the world, we are determining world-class benchmarks for the performance of our basic business processes. At the same time we are re-engineering those processes to assure their ability to live up to these world performance standards," Leuliette said.
 "All processes are to be benchmarked. They include purchasing, sales, marketing, finance and information systems. In establishing the criteria for performance, we are consulting with our customers and studying comparable operations at our competitors and at other corporations which have gained a reputation for excellence," he added.
 Quality
 Leuliette said one of the most important goals of ITT Automotive is to achieve world-class quality because it is so critical to success in the automotive world. "Our customers all tell us that global excellence in quality performance is the minimum requirement if we expect to continue to be a systems supplier," he noted.
 Standardized quality operating systems are being established worldwide throughout ITT Automotive. "This will assure our product lines or business functions will not settle for quality standards which are any less than the standards of excellence which are expected of global world-class companies," said Leuliette.
 Purchasing
 Another important step to increase efficiency and lower operating costs is the creation of regional purchasing organizations in Europe and North America, he continued.
 "These purchasing centers will be able to exert much more influence on our suppliers in negotiating favorable terms. They will be buying in greater quantities due to our global buying power," he said. "Since these purchasing centers will have access to worldwide cost and quality standards, they can insist on receiving world-class cost and quality from our suppliers in these local regions."
 The purchasing centers ultimately will allow ITT Automotive to significantly reduce its buying sources by limiting suppliers to those which consistently meet world-class standards for quality, cost and on- time delivery, he added.
 Global Aftermarket Strategy
 ITT Automotive Aftermarket is launching a comprehensive global plan for supplying the world's replacement parts markets with ITT Automotive components. This strategy, which crosses the traditional regional and national boundaries of this huge industry, will be coordinated with the worldwide consolidation of ITT Automotive's original equipment operations to take full advantage of the company's global manufacturing, supply and sales capabilities, said Leuliette.
 "This will improve our ability to market and supply Koni shock absorbers to customers worldwide, as well as increase the distribution potential for Aimco and Ate brake products, and ITT Automotive SWF wiper arms and blades."
 ITT Automotive is a $3.5 billion global supplier of components and system-oriented products to the automotive industry, including antilock brake, traction control and brake systems; fluid handling systems and components; seat structures and electrical motors; switches and lamps; precision die casting; and aftermarket products.
 ITT Corporation (NYSE: ITT), with 1992 sales and revenues of $21.7 billion, is a diversified, multinational enterprise.
 -0- 6/8/93
 /CONTACT: Gerald M. Jusco, 313-340-3443, or Val Brown, 313-340-3680, both of ITT Automotive/
 (ITT)


CO: ITT Automotive ST: Michigan IN: AUT SU: RCN

ML -- DE005 -- 6413 06/08/93 09:36 EDT
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Date:Jun 8, 1993
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