Contract electronics manufacturer Celestica Inc., has fired five of its executives in the wake of its more than doubled fourth-quarter losses.
The company let go of its chief technology officer, executive vice-president of global operations, senior vice-president for corporate strategy, senior vice-president of human resources and senior vice-president of global sales.
The moves come just days after the Toronto-based company announced a fourth quarter loss of US$60.8 million, or 27 cents a share. For fiscal 2006, the company reported a net loss of US$150.6 million, or 66 cents a share, compared to a loss the previous year of US$46.8 million, or 21 cents a share. Revenues for the year were up four per cent to US$8.8 billion from $8.47 billion.
The poor performance was credited to a previously announced $30-million write down on the value of inventory and weaker demand from telecom customers and a $59-million restructuring charge.
The not so surprising announcement was made by chief executive officer Craig Muhlhauser, who was hired by Celestica’s controlling shareholder, Onex Corp., last fall to try and turn the company around. Muhlhauser also announced the appointment of John Peri to the position of executive vice- president of global operations. Peri previously held the role of president of Asia operations, with responsibility for Celestica’s manufacturing footprint in China, Hong Kong, Japan, Malaysia, Philippines, Singapore and Thailand.
The company has also recruited Guy Delisle, from Sanmina-SCI, to run its operations in Monterrey, Mexico.
“These changes reflect Celestica’s efforts to establish a more efficient and clearly defined organization aligned to its business strategy and to create a streamlined, high-performing organization focused on delivering profitable growth and the ultimate customer experience,” a company statement said.
“Our new organization design will consolidate functions within the current organization, reducing overlap and duplication in roles and responsibilities and driving clearer accountability, greater simplicity and increased speed.”
In the wake of the announcement, Celestica shares climbed 30 cents to $7.40 after hitting $6.81 on the Toronto stock exchange last Thursday. For the current quarter, Celestica offered a revenue forecast that is relatively flat with the previous year and short of analysts’ expectations.
On Jan. 31 the company announced future cuts of up to 6,000 workers at its Mexican operations. The company is forecasting revenues of US$1.7 billion to $1.9 billion and an adjusted net loss per share of four to 15 cents for the first quarter of 2007. Analysts had previously put the quarter’s revenue outlook at about US$2.1 billion.
