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Echlin Inc.
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SPX Corporation
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Contacts:
Charles A. Bowman
SPX Director of Corporate Finance
(616) 724-5194
George Sard/Anna Cordasco/Paul Caminiti
Sard Verbinnen & Co.
(212) 687-8080
New Haven Register Page A16 March 18, 1998
Should the state play a role in Echlin's fate?
NO: Shareholders have right to control their company.
By John B. Blystone
Chairman, President & CEO
SPX Corporation
There's been a lot of attention paid recently to the effort by our company,
SPX Corp., to acquire Branford-based Echlin Inc. I wanted to take this
opportunity to answer two logical questions that have been posed by
employees, shareholders, legislators and business leaders - "What are SPX's
plans for Echlin's Connecticut operations and will they be good for us?"
I'll say the same thing that I've personally told the General Assembly's
Judiciary Committee, as well as Gov. John Rowland: SPX is committed to
continue operating Echlin's Branford plant, maintaining current
manufacturing employment levels and matching Echlin's level of community
support. That's a pledge you can count on.
That said, those who have gained a sense of comfort over the years based on
Echlin's local roots may be saying "Who needs SPX?"
Change can be unsettling, I know, and it's often more comfortable to
maintain status quo. But without change and a commitment to meet the
challenges of a changing marketplace, the future is uncertain.
The truth is this: There is no job or community security with an
underperforming company. That is why an SPX/Echlin combination makes so
much sense and why House Bill 5695 is so bad for Connecticut. This proposed
legislation would severely restrict Echlin shareholders (and shareholders
of other Connecticut companies, for that matter) from determining what's
best for the future of their company.
Those who crafted this legislation did so with the best of intentions. They
are concerned about Connecticut jobs and the future of a Connecticut
company. What they didn't initially understand was that their proposed
remedy may spread more ill than it prevents:
First and foremost: Echlin's approximately 800 Connecticut manufacturing
jobs are not in jeopardy. The only jobs in question are about 100 corporate
staff positions that SPX plans to evaluate and make decisions upon based on
merit, as any responsible company would do.
This legislation unfairly changes the rules in the middle of the game,
sending the message that Connecticut is not a good state in which to locate
a business.
House Bill 5695 is really about protecting underperforming management from
the owners of the very company they manage. This is a dangerous and
nationally unprecedented foray into corporate governance that discourages
investment in Connecticut businesses.
The business combination with Echlin that SPX has proposed is a win-win for
employees, shareholders, customers and the communities of both companies.
The combined company will be a stronger, more vibrant, world-class leader
in the vehicle service industry. Our success will be Connecticut's success
- - as the company grows, so too will jobs and tax revenue.
Let me tell you a little bit about SPX. In the past two years, our company
has realized a major renaissance, quadrupling stock value and strategically
positioning itself as a major market force. Our employees have not only
contributed to this success, but have shared in it as well.
Eight of every 10 SPX employees are part of a company compensation program
called Economic Value Added (EVA), a bonus program that financially rewards
employees who play a part in creating company value. With our performance
over the last two years, there's been a lot of success to share. We'd like
Echlin's workers to share in this success.
SPX is also a good neighbor and we look forward to extending our proven
history of community involvement to the Branford, Greater New Haven and
Connecticut business communities. Our track record speaks for itself.
The SPX Matching Gifts program fully matches charitable gifts given by SPX
employees to non-profit organizations up to $20,000 annually per employee.
SPX supports the United Way in communities where we are located. For
example, in 1997 the Muskegon, Mich., United Way received nearly
$100,000 from SPX and our employees.
SPX also contributed generously to multiple community projects and
programs. An example is our $1 million donation last year to the Community
Foundation of Muskegon County.
In the final analysis, the vast majority of Echlin's Connecticut employees
and the state of Connecticut have much more to gain than lose by allowing
the existing, proven system of shareholder democracy to run its due course.
Those interested in the future of Echlin and its employees should be
concerned - not about SPX, but about the attempt to pass House Bill 5695
and deny so many the opportunity to excel at a stronger, more vibrant
company.
