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Published: Saturday, 4/28/2007

Tecumseh Products to eliminate 310 positions, reduce overhead

TECUMSEH - Financially struggling Tecumseh Products Co. said yesterday it will cut costs by reducing some of its noncore operations and eliminate 310 jobs.

All job reductions are effective immediately, and are to improve "operating efficiency and help position it for a return to profitability," the Michigan firm said.

The job losses will come at seven North American facilities and one in the Czech Republic.

They involve mostly salaried employees and include workers at company headquarters in Tecumseh, said Teresa Hess, head of investor relations at Tecumseh Products.

The company did not provide a breakdown of the job losses at each location or the amount of money it expected to save. Worldwide, the firm had 18,500 employees at the end of 2006.

The move, which will include reducing overhead, is the result of a companywide analysis to identify duplicate and unnecessary activities in both core and noncore operations, Ms. Hess said.

The company considers production of compressors, engines and power trains, and electrical components to be core operations, so the cuts are in other areas, she said.

For example, last year Tecumseh sold its Little Giant Pump Co., which makes wastewater, sump, and other liquid pump systems, to Franklin Electric Co. because the operation was considered noncore.

Tecumseh said the downsizing and job cuts will not affect production, including compressor manufacturing, or company support for products.

The Fortune 1,000 company, which is having financial problems at one of its Brazilian operations and has more than once amended its domestic lending agreements, lost $80 million on $1.8 billion in sales last year.

The company had a power struggle at the top this year. Todd Herrick stepped down as chief executive.



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