Rockwell International Corp., Costa Mesa, Calif., plans to divide its Rockwell Automation business and spin off Rockwell Semiconductor Systems as a separate company as part of a restructuring effort. The company will also eliminate 3,800 jobs in the automation and avionics businesses.
The restructuring is intended to cut costs, particularly in the motors business, said Don Davis, chairman and chief executive of Rockwell, in a letter to shareholders June 29. The automation division has grown in just a few years from approximately $1 billion in annual sales to $4.5 billion, and that size of company requires an entirely different organization and cost structure, said a Rockwell spokesperson. Most of the cost savings are expected to come from redundant administrative functions that date back to the acquisition of Reliance Electric in 1996. There was no word at press time on the possible impact on Rockwell Automation's sales and marketing organizations.
Rockwell Automation will be divided into two operating units. Reliance motors and Dodge mechanical power transmission products will be combined into a Motor and Mechanical Power Transmission unit under Joe Swann, president, who will report directly to Davis. The rest of Rockwell Automation, including Allen-Bradley, Reliance Electric and Rockwell Software, continues to report to Jodie Glore, president and chief operating officer of Rockwell Automation.