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TRW to cut costs, sell assets
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April 28, 1999: 12:20 p.m. ET
Auto parts, aerospace maker regroups after $6.6B purchase of LucasVarity
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NEW YORK (CNNfn) - TRW Inc. said Wednesday it is looking for ways to cut costs and lower its debt after its $6.6 billion purchase of auto parts maker LucasVarity PLC is completed.
The Cleveland-based company also said it will reorganize into two units, TRW Automotive and TRW Aerospace and Information Systems. It named Ronald Sugar president of aerospace and information systems and said it will name a president for automotive as soon as possible.
Sugar previously held posts in other TRW information units. LucasVarity's chief executive, Victor Rice, said last week he wouldn't head up the auto segment at TRW.
TRW Automotive will have about $13 billion in sales and 100,000 employees while aerospace and information will generate $6 billion in sales with 35,000 employees, the company said.
To integrate LucasVarity and TRW operations, TRW (TRW) said it is forming a committee that will "focus heavily" on cost cutting and is drawing up plans for asset sales.
Chairman Joseph Gorman told shareholders at TRW's annual meeting Wednesday that the drop in TRW's stock price this year reflects Wall Street's worries about the debt taken on to buy LucasVarity, a British company that makes auto parts and has aerospace operations.
He said TRW is eyeing the sale of any asset that isn't strategic to performance, including real estate, and that any sale probably will yield an after-tax profit of $1 billion to $1.5 billion.
TRW, a major supplier to the automotive and space industries, has seen its stock fall about 25 percent over the last year. It got hit hardest in January when it announced the LucasVarity deal, which is scheduled to close May 9.
TRW stock was up 7/16 to 42-3/8 Wednesday. 
-- from staff and wire reports
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TRW Inc.
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