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OMC Lays Off 1000
5 Dec. 2000 |
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OMC Takes Steps to Reduce Costs, Improve Operating Efficiencies As Market Softens
OMC Press Release
5 Dec 2000
WAUKEGAN, Ill. -- Outboard Marine Corporation today
announced a series of actions aimed at reducing costs and improving focus on
key business segments. These moves are necessary to offset softness in the
company's operating performance, which resulted primarily from material
supplier problems on the engine side along with a recent slowdown in the
recreational marine market.
As part of this effort, the Company said it will reduce its workforce
worldwide. The reduction in force will affect about 1,000 of OMC's 7,200
employees at all levels and will be completed by the end of the year.
"A reduction like this is always difficult, especially when it affects a
large number of employees," said Roger Fix, OMC President and Chief Executive
Officer. "It is even more painful in light of the progress we have made
towards improving our operations since September. However, it is clear that
we must take more aggressive steps to reduce costs in response to the slowdown
affecting marine product sales."
OMC added that, as scheduled, it made the December 1 interest payment on
its 10-3/4 notes. It also said that it is currently investigating strategic
alternatives and has retained the investment banking firm of Houlihan, Lokey,
Howard & Zukin to help in that effort.
Concurrent with the workforce reduction, OMC announced major changes at
its powerboat operations. It has created the Recreational Boat Group, which
will include OMC's Four Winns and Chris-Craft boat companies.
John Anderson, who joined OMC in 1997 as President of Four Winns, has been
named President of the Recreational Boat Group by Sandra Meurlot, President of
OMC Boat Group Operations.
Anderson will oversee the operations of both companies and will be based
at Four Winns' headquarters in Cadillac, Michigan. Kim Bors, former
Chris-Craft President, is leaving her position to return to the Chicago area.
She will remain involved with Chris-Craft to assist in the transition.
In addition, Meurlot named Rick Fulmer Recreational Boat Group Vice
President of Sales and Marketing. Previously Vice President of Sales and
Marketing at Four Winns, Fulmer will direct those functions at both Four Winns
and Chris-Craft. He will continue to report to Anderson. Both boat lines
will continue to be marketed through their existing distribution channels.
Chris Wainscott was named President of OMC's Stratos/Javelin fishing boat
operation in Murfreesboro, Tennessee. Previously Senior Vice President of
Sales, Service and Marketing of OMC's Johnson & Evinrude outboard engine
division, Wainscott will report to Meurlot. Wainscott replaces former
Stratos/Javelin President Bob Beagle, who has left the company.
Lastly, Ken Kaul has replaced Wainscott as Vice President of Sales,
Service and Marketing at Johnson & Evinrude. Previously Vice President of OEM
Sales of Johnson & Evinrude, Kaul joined OMC in February 1999. He will report
to Fix, who also is President of the Johnson & Evinrude division.
OMC's International outboard engine and boat operations will continue to
report to John Arzbach, President of OMC International and Corporate Vice
President.
While comprehensive in their scope, the restructuring is necessary to
reduce operating expenses and improve the cost-effectiveness of OMC's
operations and preserve the strength of its brands in the market.
OMC said additional actions might be necessary if the recreational marine
market continues to weaken and the company's operating performance does not
improve.
"While we have largely resolved the supply issues that hampered our engine
operations earlier this year and are now filling our outboard engine order
backlog, OMC's financial performance has continued to decline in the fourth
quarter, typically its slowest period," said Fix. "Therefore, we must take
aggressive steps to secure the company's short- and long-term financial
viability."