Key Automotive Group is shaking things up at Breed Technologies Inc. after formally acquiring the supplier on April 25.
Most notably, Key is cutting some 3,500 Breed employees worldwide from now until the end of 2004. New Breed (and Key Plastics LLC) CEO and Chairman B. Edward Ewing says it is necessary for the supplier’s survival, as it burned through $50 million more per year in cash than it produced since emerging from Chapter 11 bankruptcy protection in December 2000.
“This performance cannot and will not continue,” says Ewing, adding Breed is aiming to cut costs by $200 million. “Breed Technologies has historically and currently used more cash than it has generated. Its costs are simply too high, (and) in order to efficiently serve our customers, we must get to a solid financial structure.”
Breed, a maker of safety components, also is cutting its corporate office staff from 290 workers to less than 60 and moving the office from Lakeland, FL, to Metro Detroit.
Ewing and more than 175 Breed leaders decided on the changes after completing a week-long strategic and operational review that included most senior managers from North America, Europe and Asia.
Furthermore, Ewing says Breed’s name will be changed and the company is mulling several possibilities to reflect its new place in the Key family.
“The name change symbolizes the beginning of the transformation of Breed Technologies into a new company – one committed to achieving superior financial performance, improving customer responsiveness, driving technological innovation and delivering high-quality parts on time,” says Ewing.
Other money-saving tactics Breed is enlisting include cutting overhead expenses “significantly,” working with suppliers to reduce overall material costs and reorganizing along regional and product lines.
Four new presidents/chief operating officers will be in charge of the new business units for North America, Europe and Asia, as well as Hamlin Inc. (sensors, switches and relays).