August 13, 1999 GENERAL INSTRUMENT CORP (GIC)
Quarterly Report (SEC form 10-Q)
RESTRUCTURINGS
In the fourth quarter of 1997, with the change in senior management, the Company undertook an effort
to assess the future viability of its satellite business. As the satellite business had been in a state of
decline, management of the Company made a decision to streamline the cost structure of its San
Diego-based satellite business by reducing this unit's headcount by 225. In conjunction with the
assessment of the satellite business, the Company also made a strategic decision with respect to its
worldwide consolidated manufacturing operations that resulted in the closure of its Puerto Rico satellite
TV manufacturing facility, which manufactured receivers used in the private network, commercial and
consumer satellite markets for the reception of analog and digital television signals, and reduced
headcount by 1,100. The Company also decided to close its corporate office and move from Chicago,
Illinois to Horsham, Pennsylvania, which was completed during the first quarter of 1998. Costs
associated with the closure of facilities include vacated long-term leases which are payable through the
end of the lease terms which extend through the year 2008. As a result of the above actions, the
Company recorded a pre-tax charge of $36 million during the fourth quarter of 1997 (see Note 7). These
restructuring costs provided cost savings in certain satellite production processes; however, declining
demand for certain satellite products has substantially offset the cost reductions. |
