Skip navigation

Gloucestershire Business News

Engineering firm gearing for major ‘cost reductions’

What it means for its major operations in Gloucestershire are yet to be made clear, but one of the world's biggest engineering firms has warned of significant 'cost reductions'.

The business, a world-leader in technology used in the current and next generation of petrol, diesel and electric vehicles, said it needed to "act with increased urgency" to battle "ongoing industry and transitional headwinds".

Its headline statement - a restructuring plan targeting more than $150 million (US) in pre-tax cost savings in 2022 - does also come with a commitment to "investing to support our longer-term growth".

American-owned Delphi Technologies employs and estimated 1,000 staff at its Stonehouse plant.

"Consistent with our first half performance, our Q3 results were impacted by ongoing industry and macro headwinds," said Richard F. Dauch, chief executive officer of Delphi Technologies.

"While we continue to make solid progress in a number of key operational and commercial areas, we must act with increased urgency to improve our financial performance.

"Today we have announced a fundamental transformation plan, which is a direct response to the major transitions and challenges our industry faces, consistent with our priority to realign and reshape Delphi Technologies for future profitable growth.

"This important and necessary step is expected to reduce our annualized costs by more than $150 million over the next three years, while significantly improving our free cash flow and return on invested capital.

"As a pioneer in propulsion technologies, we remain focused on investing to support our longer-term growth, executing on our strong business wins, and delivering on our vision to make vehicles drive cleaner, better and further."

The detail, such as we have it from the company, will see it "take a range of actions to reshape and realign its engineering footprint, as well as significantly reducing its overall cost structure, to accelerate its longer-term profitable growth".

"In total, these actions are expected to result in restructuring costs of approximately $200 million through the end of 2022. The corresponding gross cost savings are expected to amount to more than $150 million in 2022, with approximately $50 million targeted in 2020.

"In addition, the Company expects the cost reduction plan to significantly improve its cash flow performance. Net of the restructuring costs referenced above, the company expects the plan to deliver an approximately $300 million cash benefit through the end of 2023."

Read more: Delphi apprenticeship awards packs Kingsholm stadium  

Related Articles

An investigation is underway into ‘financial irregularities’ at Marketing Gloucester  Image

An investigation is underway into ‘financial irregularities’ at Marketing Gloucester

Punchline can confirm that an investigation is underway into the financial irregularities of Marketing Gloucester, its former chief executive and its book keeper.

Technology company with Gloucestershire base sold for $3.3billion Image

Technology company with Gloucestershire base sold for $3.3billion

A technology company that employs more than 1,000 staff at its Gloucestershire base has been sold in a deal worth $3.3billion.

Man appears in court on attempted murder charges after Gloucester City centre stabbing Image

Man appears in court on attempted murder charges after Gloucester City centre stabbing

The incident caused the closure of Eastgate Street and Clarence Street on Sunday and left a man in hospital with serious injuries.

It’s nearly time to enter Gloucester 10k Image

It’s nearly time to enter Gloucester 10k

Entries open this week (Saturday 1st February) for this year’s Gloucester 10k on 5th July.

Copyright 2020 Moose Partnership Ltd. All rights reserved. Reproduction of any content is strictly forbidden without prior permission.