April 1, 2009 / 3:27 PM / in 9 years

Rockwell Auto to furlough workers, trim benefits

* Tells staff to take 3 unpaid days off per quarter

* Suspends U.S. retirement account contributions

* CEO tells employees to expect no bonuses

* CEO asks for 20 percent salary cut

By Scott Malone

BOSTON, April 1 (Reuters) - Rockwell Automation Inc (ROK.N) will impose three days of unpaid furlough per quarter on its workforce to cut costs this year and has advised staff not to expect bonuses, a spokesman said on Wednesday.

The news came to the company’s 21,000 workers in an email from Chief Executive Keith Nosbusch, who also said he would be asking the board to cut his salary by 20 percent.

The U.S. maker of systems that help factories run more smoothly will also suspend contributions to U.S. employees’ 401(k) retirement savings accounts for the rest of its fiscal year, which ends Sept. 30.

“Our CEO said, based on the current economic outlook and business outlook, we don’t expect to pay any bonuses this year,” said John Bernaden, a spokesman for the Milwaukee-based company. The company’s bonus programs remain in place, but it is unlikely to hit the targets that would result in payouts.

He added that furloughs — unpaid days off — will be imposed where local laws allow but the company aims to make them global.

U.S. municipalities, universities and companies including newspaper publisher Gannett Co Inc (GCI.N) and auto parts maker Tenneco Inc (TEN.N) have turned to furloughs as a way to cut payroll costs in this recession without laying off staff permanently.

Rockwell in February slashed its profit target for the year, citing deteriorating demand for industrial equipment in almost all the industries it serves. Analysts, on average, look for the company’s per-share profit from continuing operations to tumble by more than half as sales fall about 21 percent.

The company in September said it would lay off about 600 people worldwide as part of a plan to cut costs by about $240 million.

There have been additional scattered layoffs since that announcement, Bernaden said.

Nosbusch last year was awarded compensation worth $7.6 million, according to the company’s most recent proxy filing with the U.S. Securities and Exchange Commission. That amount included $1 million in salary, $2 million in stock awards, $2.3 million in option awards, $561,600 in non-equity incentive plan compensation, $1.6 million related to a change in pension value and deferred compensation and $63,820 in other compensation, which included tax gross-up payments.

He and four other top Rockwell executives listed in the proxy were paid no bonuses in 2007 or 2008.

Bernaden said the board would decide how to implement Nosbusch’s requested pay cut.

Rockwell shares are down about 62 percent over the past year, a slightly deeper drop than the 56 percent slide of the Standard & Poor’s capital goods industry index .GSPIC. In morning trade, Rockwell shares were up 6 cents to $21.90 on the New York Stock Exchange. (Reporting by Scott Malone, editing by Gerald E. McCormick)

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