National Grid Restructures US Business, Plans $200 Million Cost Cuts
January 31 2011 - 8:41AM
Dow Jones News
National Grid PLC (NG.LN) Monday announce a change of group
executive responsibilities and a major restructuring of its U.S.
business together with a $200 million U.S. efficiency program
including job cuts.
MAIN FACTS:
-With effect from April, National Grid is evolving from its
current global lines of business model to a regional model
supported by global functions, with a tighter jurisdictional and
local focus to drive customer value.
-Restructuring will focus the responsibility for all U.S.
businesses under Tom King in the new position of Executive Director
and President, U.S. from the beginning of April.
-Nick Winser will assume the position of Executive Director,
U.K., responsible for all U.K. businesses, and responsibility for
the U.K. Gas Distribution business will transfer to him from March
1; Mark Fairbairn, currently Executive Director, Gas Distribution,
will step down from the Board and leave at the end of March.
-This evolution of the U.S. structure will be combined with a
targeted reduction in U.S. operating costs of around $200 million
(GBP125 million) per annum.
-Cost cuts will be achieved primarily through the reduction of
around 1200 positions across the U.S. employee base; cuts expected
to be reductions in management and administrative positions and,
where feasible, will be achieved through voluntary redundancy.
-Senior management appointments into the new U.S. structure have
already been made with a 26% reduction in the number of roles;
remaining appointments are expected to be completed by August, with
the targeted savings run rate of $200 million p.a. achieved by the
end of the 2011/12 financial year.
-Estimates that the cost of achieving these efficiency savings
will be around $100 million, which Company expects to be incurred
primarily in 2011/12.
-Shares at 1410 GMT up 9 pence, or 1.7%, at 555 pence valuing
the company at GBP19.47 billion.
-By Ian Walker, Dow Jones Newswires; 44-20-7842-9296;
ian.walker@dowjones.com
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