EXHIBIT 99.1
[TENNECO AUTOMOTIVE LOGO]
news release
For Immediate Release
Contacts: Jane Ostrander
Media Relations
847 482-5607
jane.ostrander@tenneco-automotive.com
Margie Pazikas
Media Relations -- Europe
32 2 706 9470
margie.pazikas@eu.tenneco-automotive.com
Leslie Hunziker
Investor Relations
847 482-5042
leslie.hunziker@tenneco-automotive.com
TENNECO AUTOMOTIVE REDUCES SALARIED WORK FORCE
COMPANY ALSO CONSOLIDATES BUSINESS UNITS
Lake Forest, Illinois, October 28, 2004 -- Tenneco Automotive (NYSE: TEN)
announced today that the company plans to eliminate up to 250 salaried positions
(about six percent) -- the majority at the middle and senior management levels
- -- from its worldwide work force as part of a global restructuring. The company
will also reduce the number of strategic business units to six by consolidating
its Australia/New Zealand operations with its Asia operations to create a new
Asia-Pacific business unit.
This restructuring initiative accelerates plans to reduce SGA&E (selling,
general, administrative and engineering) expense and improve the company's gross
margin performance. The company is taking this action to strengthen its
competitiveness and sustain turnaround efforts in the face of challenging
industry conditions, including rising raw material costs.
"We regret the impact this action will have on our employees," said Mark P.
Frissora, chairman and CEO, Tenneco Automotive. "The reality of volatile market
conditions makes this move imperative. The decision to reduce our workforce,
while difficult, is the right step to help maximize our potential for success
with a lower cost structure and more efficient operations."
Tenneco Automotive's Australia/New Zealand business unit will become a part of a
newly created Asia-Pacific business unit, which will also include the company's
operations in China, Japan, India, Thailand and Singapore, as well as its
Japanese original equipment business worldwide. Timothy Donovan, executive vice
president, will lead the Asia Pacific business unit. Previously, Donovan was
managing director of the International Group, which
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included the company's operations in South America and Asia. Alex Drysdale,
currently managing director for the Australia/New Zealand business unit, is
resigning to pursue other interests.
Don Miller, currently vice president and general manager of the European
aftermarket, will take on a new role of establishing and developing the
company's aftermarket business in China. As a result, the European aftermarket
sales and marketing organization will report directly to Hari Nair, executive
vice president and managing director of Tenneco Automotive Europe.
Finally, Tenneco Automotive's South American operations, which had been part of
the company's International business unit, will now be moved under the company's
European operations and managed by Hari Nair as well.
Tenneco Automotive estimates that this cost reduction plan will be completed by
the end of the first quarter 2005 and will generate approximately $20 million in
annual savings when fully implemented. The company anticipates taking charges
between $20 million and $24 million, over the next two quarters, related to the
reductions announced today. All work force reductions will be done in compliance
with legal and contractual requirements.
Tenneco Automotive is a $3.8 billion manufacturing company with headquarters in
Lake Forest, Illinois and approximately 19,200 employees worldwide. Tenneco
Automotive is one of the world's largest designers, manufacturers and marketers
of emission control and ride control products and systems for the automotive
original equipment market and the aftermarket. Tenneco Automotive markets its
products principally under the Monroe(R), Walker(R), Gillet(R) and
Clevite(R)Elastomer brand names. Among its products are Sensa-Trac(R) and Monroe
Reflex(R) shocks and struts, Rancho(R) shock absorbers, Walker(R) Quiet-Flow(R)
mufflers, Dynomax(R) performance exhaust products, and Clevite(R)Elastomer
noise, vibration and harshness control components.
This press release contains forward-looking statements. Words such as
"anticipate," "potential," "encouraged," "believe" and similar expressions
identify forward-looking statements. These forward-looking statements are based
on the current expectations of the company (including its subsidiaries). Because
these forward-looking statements involve risks and uncertainties, the company's
plans, actions and actual results could differ materially. Among the factors
that could cause these plans, actions and results to differ materially from
current expectations are: (i) changes in automotive manufacturers' production
rates and their actual and forecasted requirements for the company's products,
including the overall highly competitive nature of the automotive parts
industry, and the company's resultant inability to realize the sales represented
by its awarded book of business which is based on anticipated pricing for the
applicable program over its life, and is subject to increases or decreases due
to changes in customer requirements, customer and consumer preferences, and the
number of vehicles actually produced by customers; (ii) increases in the costs
of raw materials, including the company's ability to successfully reduce the
impact of any such cost increases through materials substitutions, cost
reduction initiatives and other methods; (iii) the cyclical nature of the global
vehicular industry, including the performance of the global aftermarket sector,
and changes in consumer demand and prices, including longer product lives of
automobile parts and the cyclicality of automotive production and sales of
automobiles which include the company's products, and the potential negative
impact on the company's revenues and margins from such products; (iv) the
company's continued success in cost reduction and cash management programs and
its ability to execute restructuring and other cost reduction plans and to
realize anticipated benefits from these plans; (v) the general political,
economic and competitive conditions in markets and countries where the company
and its subsidiaries operate, including the strength of other currencies
relative to the U.S. dollar and currency fluctuations and other risks associated
with operating in foreign countries; (vi) governmental actions, including the
ability to receive regulatory approvals and the timing of such approvals; (vii)
changes in capital availability or costs, including increases in the company's
costs of borrowing (i.e., interest rate increases), the amount
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of the company's debt, the ability of the company to access capital markets and
the credit ratings of the company's debt; (viii) the cost and outcome of
existing and any future legal proceedings, and compliance with changes in
regulations, including environmental regulations; (ix) the company's ability to
develop and profitably commercialize new products and technologies, and the
acceptance of such new products and technologies by the company's customers and
the market; (x) further changes in the distribution channels for the company's
aftermarket products, further consolidations among automotive parts customers
and suppliers, and product warranty costs; (xi) changes by the Financing
Accounting Standards Board or other accounting regulatory bodies of
authoritative generally accepted accounting principles or policies; (xii) acts
of war, riots or terrorism, including, but not limited to the events taking
place in the Middle East, the current military action in Iraq and the continuing
war on terrorism, as well as actions taken or to be taken by the United States
or other governments as a result of further acts or threats of terrorism, and
the impact of these acts on economic, financial and social conditions in the
countries where the company operates and (xiii) the timing and occurrence (or
non-occurrence) of transactions and events which may be subject to circumstances
beyond the control of the company and its subsidiaries. The company undertakes
no obligation to update any forward-looking statement to reflect events or
circumstances after the date of this press release. Additional information
regarding these risk factors and uncertainties is detailed from time to time in
the company's SEC filings, including but not limited to its report on Form 10-K
for the year ended December 31, 2003. Further information can be found on the
company's web site at www.tenneco-automotive.com.
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