TRW posts 3Q earnings slide; will cut 2,400 jobs

CLEVELAND - TRW Inc. on Wednesday reported an 18 percent decline in third-quarter operating earnings, due largely to a drop in sales and prices of automotive components, and said its aeronautics business would be hurt by the Sept. 11 attacks.

TRW, which pulls in nearly two-thirds of its revenue from auto supply sales, said earnings fell to $75 million, excluding unusual items, from $91 million a year earlier.

TRW said it plans to cut its aeronautics work force by 16 percent because of the "new realities" in the airline business and airframe manufacturing. It said it had announced actions to cut a total of 3,000 salaried positions company-wide since the Sept. 11 attacks.

On Tuesday TRW announced plans to cut 2,400 jobs in its automotive operations, including a 10 percent reduction in salaried positions. It blamed the weak economy, worsened by the Sept. 11 attacks. TRW has 102,878 employees worldwide, according to its Web site.

PROSPECTS AFTER SEPT. 11 ATTACKS

TRW's various businesses have been broadly affected by developments in the wake of the attacks on New York and Washington. TRW said the short-term performance of its aeronautical unit, which builds systems for use by commercial airlines, will suffer due to "major readjustments" by airlines and airplane makers, which have struggled for cash amid a drop in demand for flights.

However, TRW's aerospace, electronics and systems units saw stronger activity from key U.S. Department of Defense programs during the third quarter. The units can provide capabilities for military training, battle management, and other military activities.

"In this uncertain environment, strong performances in our Systems and Space and Electronics businesses should enable the company to better weather cyclical downturns," TRW Chairman, President and Chief Executive David Cote said.

Total sales slid to $3.9 billion in the third quarter from $4.1 billion a year earlier. Space and electronics sales grew 9 percent to $505 million, and systems sales grew 8 percent to $761 million.

Automotive unit sales slid 7 percent to $2.3 billion.

In addition to work force reductions in its auto and aeronautics divisions, TRW said it had cut costs during the quarter by reducing its net debt by about $200 million.

TRW is No. 8 on the Automotive News ranking of the top 150 OEM suppliers to North America with $5.6 billion in 2000 in parts sales to North America.

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