E-Z-GO 2001 Annual Report Download - page 6

Restructuring: First-Year Savings of $124 M illion
Our restructuring effort has three primary objectives: right-size our businesses to better reflect
market demand; capitalize on the synergies that exist among the companies we’ve acquired in
recent years; and position the enterprise to better m eet the rising expectations of customers
and to grow as economies begin to rebound. We’ve completed the first full year of our m ulti-
year restructuring program, significantly enhancing operating efficiencies and perm anently taking
out costs. We ended 2001 with restructuring savings of about $124 m illion (excluding Textron
Automotive Trim ), which exceeded our original savings projection of $50 to $70 m illion.
Through our restructuring effort, w e reduced our global w orkforce by about 5,000 – nearly
9 percent. By the end of 2002, we plan to close a total of 59 facilities, including 30 m anufacturing
plants, and achieve a total w orkforce reduction of 7,300 employees. Looking ahead to 2003, we
expect annual restructuring savings to be at least $250 million.
Reconfiguring: Strengthening Our Business Mix
We are reconfiguring and strengthening our portfolio to align it w ith our strategic direction –
strong global businesses and pow erful brands in attractive industries. To ensure that every
Textron business fits this direction, w e have developed new criteria to rigorously evaluate our
existing businesses and future acquisition targets. This comprehensive analysis com pares business
characteristics across several categories such as customer loyalty, brand strength, industry
grow th rates, cyclicality and financial performance. With these criteria as our guide, in 2001 w e
lessened our dependence on cyclical businesses with declining future grow th rates by divesting
our Textron Autom otive Trim and Turbine Engine Com ponents businesses, which together
contributed $1.6 billion in annual revenues. Divestitures like these create new opportunities for
us to buy dow n debt, repurchase shares and reinvest in future grow th platforms.
Reengineering: Unleashing the Power of the Enterprise
For many decades, Textron’s business m odel has been to buy and grow strong com panies,
providing each business with the financial resources to operate independently. Today, our
business model calls for an additional step: tap into the know-how, talent and resources found
at the individual businesses and leverage these assets across our $12 billion organization.
We call this enterprise excellence.
During 2001, we deployed m ore than 20 cross-functional teams as just one tool in our quest
for enterprise excellence. Case in point: Our Supply Chain Initiative, driven by manufacturing and
purchasing professionals from across the company, is an excellent example of w here w e are
using councils to develop an integrated and holistic approach to drive out costs and achieve
com plete custom er satisfaction. As we set the Supply Chain Management wheel in motion,
we are already realizing impressive efficiency gains. Just one year into our strategic sourcing
program, w e achieved savings exceeding $100 m illion in 2001. This is just the beginning. We
expect our supply chain efforts to contribute significantly to our customer satisfaction and
financial performance going forward.
Other initiatives range from dramatically im proving our w orldwide IT infrastructure to
creating a more cost-effective, company-wide m edical plan for our em ployees. Collectively, our
reengineering initiatives w ill drive increased shareholder value as we becom e a more
coordinated, efficient network of com panies.
4Textron Annual Report