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02-15-2005, 11:45 AM
CAE announces layoffs, business restructuring
Dateline: Monday February 14, 2005
On the heels of a C$347 million ($280.5 million) quarterly loss, Canadian simulator and training specialist CAE announced it will lay off 450 people as part of a reorganization of its business units intended to eliminate redundancy.
Under the new structure announced by President and CEO Robert Brown, who took over last Aug., a new Simulation Products Group "will consolidate all manufacturing activities and include engineering, program management and global procurement" that previously existed separately in both the Civil Training Group and the Military Group.
These two groups will continue to exist and will be devoted to training, simulation, modeling and sales for their specific markets. The reorganization takes effect April 1 and is expected to result in "significant savings." Results for the third period ended Dec. 31 included a noncash writeoff totaling C$443.3 million (C$354.5 million after tax). The company said the writeoffs cover reductions in goodwill as well as nonperforming assets including deferred R&D. "The continued lack of profitability of the civil aviation market, a decline in demand for 30-to-50 seat passenger regional jets, and the higher Canadian dollar" led it to "lower estimates of the future cash flows expected from its investments in its civil business," leading to the reductions in goodwill.--PF
Dateline: Monday February 14, 2005
On the heels of a C$347 million ($280.5 million) quarterly loss, Canadian simulator and training specialist CAE announced it will lay off 450 people as part of a reorganization of its business units intended to eliminate redundancy.
Under the new structure announced by President and CEO Robert Brown, who took over last Aug., a new Simulation Products Group "will consolidate all manufacturing activities and include engineering, program management and global procurement" that previously existed separately in both the Civil Training Group and the Military Group.
These two groups will continue to exist and will be devoted to training, simulation, modeling and sales for their specific markets. The reorganization takes effect April 1 and is expected to result in "significant savings." Results for the third period ended Dec. 31 included a noncash writeoff totaling C$443.3 million (C$354.5 million after tax). The company said the writeoffs cover reductions in goodwill as well as nonperforming assets including deferred R&D. "The continued lack of profitability of the civil aviation market, a decline in demand for 30-to-50 seat passenger regional jets, and the higher Canadian dollar" led it to "lower estimates of the future cash flows expected from its investments in its civil business," leading to the reductions in goodwill.--PF