LONDON - LucasVarity has grouped all its automotive operations in one division and announced plans to sell its heavy-vehicle brakes business.
Besides streamlining operations, the supplier aims to speed the integration of electronics with other component groups.
The new division, LucasVarity Automotive, combines light-vehicle brakes, diesel systems, electrical and electronic systems and aftermarket operations.
John Plant, former managing director of electrical and electronic systems, will head the new division.
He will report to Tony Gilroy, LucasVarity's chief operating officer, and chairman of LucasVarity Automotive.
Steve Lunn, previously managing director of light-vehicle braking systems, was named chief operating officer of the division.
Other appointments will be made within a few months as light-vehicle brakes and electronics operations are further integrated, a company insider said.
Analysts welcomed the reorganization.
'They need to knit all the operations together much more closely,' said Robert Speed, research director at UK-based Henderson Crosthwaite. 'It makes sense to bring electronics and brakes closer together with, for example, the advent of brake-by-wire. It also makes sense to sell the heavy brakes unit because it lacks critical mass in a sector that is rapidly consolidating.'
Lucas Industries and Varity Corp. of the USA merged in September 1996 to become one of the world's largest automotive suppliers.
Combined sales of LucasVarity's automotive units were £3.4 billion ($5.6 billion) last year. The light-vehicle brakes business accounted for the biggest share, about £1.6 billion.
At the time of the merger, the company announced plans to cut 3,000 jobs and spend about £120 million to realize about £120 million in cost savings.
'We are on track to achieve the cost savings,' said Joseph Cantie, director of investor relations. 'There is an enormous amount of restructuring within plants, a lot of activity.'
Cantie said Lucas lowered costs by £43 million last year and plans to cut another £50 million this year and £30 million in 1999.