Summary
Deere & Company (DE) filed an 8-K on June 30, 2009, to provide an update on a previously announced organizational restructuring. Effective at the start of the third quarter of 2009, the company combined its Agricultural Equipment segment with the Commercial and Consumer Equipment segment. This strategic move is intended to enhance efficiency, improve customer alignment, and reduce overall costs. The company also disclosed updated estimates regarding voluntary employee special termination benefits. These benefits, related to the new organizational structure, are now expected to incur pre-tax expenses of approximately $100 million, primarily in the fourth quarter of fiscal year 2009. While this represents an increase from prior estimates, Deere anticipates first-year savings of approximately $75 million resulting from these employee separations.
Key Highlights
- 1Deere is combining its Agricultural Equipment and Commercial and Consumer Equipment segments effective Q3 2009 to improve efficiency and reduce costs.
- 2The restructuring is expected to lead to greater alignment to meet worldwide customer needs.
- 3Voluntary employee special termination benefits are now estimated to cost approximately $100 million pre-tax.
- 4These termination expenses are primarily anticipated in the fourth quarter of fiscal year 2009.
- 5The company expects to realize approximately $75 million in first-year savings from these employee separations.
- 6The expense and savings estimates have been revised from previous disclosures in the April 30, 2009 10-Q.