Harris Spins Off Lanier, Implements Drastic Restructuring Plan

Melbourne, FL-based Harris Corp. is launching two dramatic initiatives designed to increase shareholder value and position Harris and its Lanier Worldwide subsidiary for new growth. The company will undertake specific actions to reposition the company to become a pure communications equipment company. In addition, Harris will spin off its Lanier Worldwide subsidiary to its shareholders. These initiatives will create two leading companies in their respective markets—communications and office equipment.

The repositioning actions from Harris include realigning the commercial and government businesses into one company with six divisions, each focused on specific communications markets. Harris will also actively pursue new alliances and partnerships to strengthen Harris' current position in the global communications equipment market.

Harris plans to eliminate its sector organization level and will streamline the overhead structure, including the reduction of 300-400 staff positions, which is expected to result in an annual savings of $20 to $30 million.

Harris intends to sell its power semiconductor operation, including fabrication and assembly facilities in Pennsylvania, Ohio, Ireland, and Malaysia. Harris' board of directors previously authorized management to explore the sale of the company's commodity power semiconductor business. Discussions are underway with several potential buyers for the $300 million

Following these actions, Harris will feature six divisions and about 12,000 employees, all focused on communications equipment, systems, and support services, concentrating on the wireless, broadcast, government systems, and network support markets. This business represents about $2.3 billion of Harris' total revenue of about $3.9 billion in the current fiscal year, ending July 2. The repositioning initiatives are independent of the Lanier break.

The Lanier transaction, which is expected to take the form of a tax-free spin-off to Harris shareholders, should be finalized this summer.