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Rockwell sets $400M charge
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September 14, 1998: 10:50 a.m. ET
Electronic controls company to take additional restructuring charge in 4Q
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NEW YORK (CNNfn) - Rockwell International Corp., which previously announced it will spin-off its lagging semiconductor business, said Monday it will take a pre-tax charge of about $400 million in the fourth quarter to cover the costs of restructuring.
The company also noted it is resizing its Seminconductor Systems unit and is proceeding with plans to spin-off the business unit to shareholders in December.
In June, Costa Mesa, Calif.-based Rockwell said it will cut 3,800 workers as part of its long-term cost-cutting strategy. The company said it would take a $625 million pretax charge against third-quarter earnings to cover the cost of severance packages.
At the time, the company said it would take an additional fourth-quarter charge related to the restructuring, but declined to offer specifics.
"As we indicated in our previous guidance, successful implementation of several restructuring actions to position Semiconductor Systems for profitability following the spin-off is one of our most important tasks over the next several months," Rockwell Chairman and Chief Executive Don H. Davis said.
Dwight Decker, president of the semiconductor unit, will become president and chief executive officer of the new company. The restructuring is expected to be completed by the end of 1999.
Rockwell sold its defense and aerospace operations two years ago and has been trimming fat to focus on microchips used in computer modems, such as the V.90 chip, and various plant-floor automation products.
Shares of Rockwell (ROK) were up 1-9/16, or more than 4 percent, at 40-1/8 Monday morning on the New York Stock Exchange. 
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Rockwell
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