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ATS Adjusts North American ASG Capacity as Next Step in Improvement Program

ATS Automation


CAMBRIDGE, ON, Jan. 10 /CNW/ - ATS Automation Tooling Systems Inc. today announced it is reducing its Automation Systems Group (ASG) workforce in North America as part of an aggressive ongoing improvement program to strengthen performance and improve global market positioning.

The rationalization will reduce ASG employment by approximately 180 in North America (7% of the ASG global workforce), with approximately 100 positions impacted in Cambridge, Ontario. As a result, estimated severance and related costs of approximately $5 million are expected to be expensed during the fourth quarter of fiscal 2007 (three months ended March 31, 2007). The workforce rationalization is expected to decrease ATS's annualized payroll costs by an estimated $11 million pre-tax.

‘‘The decision to further streamline our operations and reduce the costs of underutilized capacity was arrived at carefully, giving full consideration to our strategic roadmap, our long-term prospects and the need to reallocate resources to high opportunity markets,’‘ said Jim Sheldon, President ASG North America. ‘‘As a result, we are confident that this move, combined with other cost savings and process improvements already implemented, will make ASG North America a stronger, more competitive business, which is better able to achieve our customer and shareholder goals.’‘

ATS implemented its long-term strategic roadmap in the fall of 2005 and has made substantial operational headway since by:

  • investing in new people, equipment, facilities and infrastructure in China and South East Asia
  • divesting or closing five under-performing or non-strategic operations in North America and Europe
  • reducing costs through aggressive supply chain management and value engineering to improve profitability and combat foreign exchange pressures
  • implementing North American organizational restructuring
  • employing comprehensive new global brand operational standards and sales processes
  • growing Repetitive Equipment Manufacturing and other capabilities to serve healthcare markets

‘‘The actions we've taken today are necessary to help us further improve overall performance as we address the significant negative impact of foreign exchange, continuing restructuring in North American automotive markets and migration of manufacturing to offshore markets,’‘ said Ron Jutras, ATS President and CEO. ‘‘As a global company, we are committed to enhancing our ability to serve the needs of our customers in North America and abroad and to generating improved investment returns for ATS shareholders.’‘

About ATS
ATS Automation Tooling Systems Inc. provides innovative, custom designed, built and installed manufacturing solutions to many of the world's most successful companies. Founded in 1978, ATS uses its industry-leading knowledge and global capabilities to serve the sophisticated automation systems' needs of multinational customers in healthcare, computer/electronics, automotive and consumer products. Through its solar business, ATS participates in the rapidly-growing solar energy industry. It also leverages its many years of repetitive manufacturing experience and skills to produce, in high volume, precision components and subassemblies and to answer the specialized repetitive equipment manufacturing requirements of customers. ATS employs approximately 3,600 people at 26 manufacturing facilities in Canada, the United States, Europe, southeast Asia and China. The Company's shares are traded on the Toronto Stock Exchange under the symbol ATA. Visit the Company's website at www.atsautomation.com.

Note to Readers
This press release contains certain statements that constitute forward-looking information within the meaning of applicable securities laws (‘‘forward-looking statements’‘). Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of ATS, or developments in ATS's business or in its industry, to differ materially from the anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements. Forward-looking statements include all disclosure regarding possible events, conditions or results of operations that is based on assumptions about future economic conditions and courses of action. Forward-looking statements may also include, without limitation, any statement relating to future events, conditions or circumstances. ATS cautions you not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. Forward-looking statements relate to, among other things, a reduction in workforce and the estimated savings and severance costs related thereto; management's belief as to the positive impacts that the workforce reduction and other initiatives will bring about. The risks and uncertainties that may affect forward-looking statements include, among others, higher than expected severance costs, negative reaction from ATS customers, the failure of improvement initiatives to bring about expected benefits, and other risks detailed from time to time in ATS's filings with Canadian provincial securities regulators, including ATS's Annual Report and Annual Information Form for the fiscal year ended March 31, 2006. Forward-looking statements are based on management's current plans, estimates, projections, beliefs and opinions, and ATS does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change. %SEDAR: 00002017E

For further information:

Gerry Beard, Vice President and Chief Financial Officer

(519) 653-6500

Carl Galloway, Vice President and Treasurer

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