Four months after its acquisition of LucasVarity plc,Inc. says it is on pace to achieve at least $200 million in cost savings.
Automotive profits before taxes for the Cleveland-based company were $238.2 million in the second quarter of 1999, up from $153.1 million in '98. Still, operating margins for the quarter declined from 8.4% in '98 to 7.2% in '99.
|7/22/'99||% Chg. |
|% Chg. |
Yr. to Date
|Note: This index is a weighted average with a 100-point base figured from 1/2/97. For details see Ward's Automotive Reports, May 3, '99, insert. |
Source: Ward's/Roney Capital Markets.
The LucasVarity deal was part of a strategy to improve profitability for automotive operations, which have traditionally lagged behind's bigger money maker, aerospace and information systems.
But it will take more time for the combined company, now a leader in brake, suspension, steering and safety systems, to bear fruit, as the consolidation is far from complete.
Six manufacturing plants have been closed and eight others have been announced for closure or sale. With LucasVarity, TRW's second-quarter sales increased to $3.3 billion in the second quarter of 1999, up from $1.8 billion in like-'98. The company has set a goal to reduce net debt by $2.5 billion by 2001.
In other supplier news:Corp. plans to sell off two aftermarket businesses: Truckline Parts Centres and Sierra International Inc. Dana also wins a contract worth $40 million to supply AG its first hydraulic clutch actuation system for compact models. The Ward's Supplier Index fell just 0.7% last week, compared to the 3.5% decline of the Standard & Poor's 500. Of the 63 companies tracked, 30 lost ground.