Vishay Unveils $35 Mln Global Cost-cutting Programs

(RTTNews) - Vishay Intertechnology, Inc. (VSH) on Monday announced global cost reduction programs as part of its continuous efforts to improve efficiency and operating performance.

The programs include a plan to reduce selling, general, and administrative costs company-wide, and targeted streamlining and consolidation of production for certain product lines within its Capacitors and Resistors & Inductors segments.

The programs in total are expected to lower costs by about $35 million annually when fully implemented, at expected cash costs, mainly severance, of about $30 million.

The implementation of the programs will not impact planned research and development activities, or the company's growth initiatives in Asian markets.

The company expects to reduce SG&A costs by about $17 million annually. The company expects the SG&A cost reductions to be fully achieved by the end of 2016.

The company said it will first solicit volunteers to accept a voluntary separation / early retirement offer. The voluntary separation benefits vary by country and job classification, but generally offer a cash loyalty bonus. Additional involuntary terminations will likely be necessary to achieve the cost reduction targets.

The targeted plans to streamline and consolidate production of certain product lines are expected to decrease costs of products sold by approximately $18 million annually. The plans include the Zwolle, Netherlands aluminum capacitors facility closure announced on June 30. Except for the Zwolle facility, no other facility closures are currently expected pursuant to the programs. The production transfers will be completed in steps by the end of 2017.

The newly announced programs do not alter or expand the MOSFETs Enhanced Competitiveness Program, announced in 2013 and currently being implemented by the company.