NEWS RYDER TAKES STEPS TO COPE WITH THE GLOBAL ECONOMIC MELTDOWN

RYDER TAKES STEPS TO COPE WITH THE GLOBAL ECONOMIC MELTDOWN

ryder takes steps to cope with the global economic meltdown
 Ryder has announced a set of strategic initiatives to increase its competitiveness and drive long-term profitable growth.
 

The initiatives include discontinuing current operations in several international markets and eliminating positions primarily in the US, to align costs with current and anticipated levels of business.

These steps will allow the company to focus on enhancing the competitiveness and growth of its service offerings in the US, Canada, Mexico, the UK and Asia.

Ryder will discontinue current Supply Chain Solutions (SCS) operations during 2009 in certain international markets and transition out of specific SCS customer contracts in order to focus on the industries, accounts, and geographical regions that present the greatest opportunities for competitive advantage and long-term sustainable profitable growth.

This will include discontinuing current operations in the markets of Brazil, Argentina, and Chile, and transitioning out of SCS customer contracts in Europe. These operations and contracts accounted for gross revenue of approximately US$200 million and operating revenue of approximately US$120 million, or roughly 3% of consolidated revenue in 2007. Approximately 45% of this operating revenue was derived from the automotive sector. All of these actions will involve individualized customer transition schedules that will be implemented on a contract-by-contract basis to provide a smooth transition of Ryder's role. The majority of these actions are expected to be completed and benefit earnings by the latter part of 2009.

This decision will affect approximately 2,400 Ryder employees.  However, since the affected contracts involve important services and functions that actively support customers' operations, the transition process is expected to result in opportunities for separated Ryder employees to continue serving the same customer under Ryder's eventual successor in each customer relationship.

The abovementioned actions will enable Ryder to focus the organisation and its resources to expand its service offerings, diversify its mix of industries served, and continue its pursuit of "tuck-in" and strategic acquisitions that create synergies and/or expand capabilities.

In the US, Canada and Mexico, emphasis will be placed on further strengthening Ryder's market position. In the UK, Ryder will focus on delivering profitable growth in the Fleet Management Solutions and Dedicated Contract Carriage product lines. Ryder will also continue to develop its Asia capabilities including strengthening its role as a facilitator of commerce and production between companies and resources in the North American and Asia regions.

In addition to these longer-term strategic initiatives, Ryder is responding to near-term challenges in the overall economy by eliminating approximately 700 positions - primarily in the US, which is expected to result in cost savings of around US$36 million for the company in 2009. Where appropriate, Ryder will also significantly reduce its use of contractors and temporary employees throughout its operations.

Due to the severity of recently announced downturns in automotive production in North America, Ryder will issue temporary layoffs, primarily in the US, to approximately 1,300 drivers and warehouse workers, and approximately 125 salaried employees as a result of reduced service levels required to support greatly reduced production activity related to certain automotive customer accounts.

Ryder chairman & CEO Greg Swienton said that these initiatives are expected to help the company to not only weather a difficult environment but also emerge from the current downturn as a stronger organisation.
"Although the decisions we've made have been difficult, especially in terms of the affected employees and customers, we believe these are necessary and responsible actions to help ensure a strong future for Ryder, its employees, customers, and investors," said Swienton.


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