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Tower additionally, has not yet received government grants relating to its cap-ex investments during 2006 through 2008, which were promised, committed and two years past due. To this end, Tower is filing a petition with the Israeli High Court of Justice targeting an approval certificate from the State of Israel for up to $80 million of grants, approximately $40 million of which are overdue.
The plan's key areas of focus are:
- Immediate reduction in workforce of approximately 170 employees, primarily in managerial and support related functions, which Tower expects will result in about $14 million per annum reduction of employment related and activity expenses
- Changes in Tower's organizational structure to generate a wider span of control per manager
- Continued materials and spare parts costs savings through multiple sourcing and price negotiation
Tower's recently released acquisition of Jazz Semiconductor creates additional opportunities for synergies, which Tower plans to realize through operational and purchasing efficiencies. This acquisition is targeted to result in a near doubling of revenue and EBITDA.
"These measures are needed for Tower to overcome the current unfavorable market and economic trends, hence improving Tower's financial picture", said Russell Ellwanger, CEO of Tower Semiconductor. "This leaner organizational structure will allow Tower to be stronger in the market and sets the proper foundation for the integration of activities surrounding the Jazz acquisition." -- Tower Semiconductor Ltd
Posted May 31st, 2008 by ruzik_tuzik
