AEROSPACE SYSTEMS,

INC.(A)
By Group Cubana

Summary
Ted Sowinski was the chief executive
officer of Aerospace.
NASA being emitted from the
contraptions innards.
Their Contract for building a new space
probe vehicle had been cancelled.
The board of directors had discussed
the matter at its last meeting

Meeting was held with the companys

divisional vise presidents.
Agenda was to be the execution of budget
reductions.
Bill Rooney Vise president of electronics
division was directed to reduce the
budget for his division by 20 percent.
Michiko takanaga manager of sales
operations for small consumer electronics.

The key to meeting the budget mandates

was cutting payroll costs.

32% of payroll total benefit package

17% of payroll FICA, compensation
Revenue generated 85 million $ in 2000
Total budget 76 million $
Total payroll 18 million dollar
331 employees 91 sales reps
Average year compensation 76,000 $ a year
Field selling expenses $ 2.9 million
Travel, lodging - $ 2 million

Alternate was to get the sales reps

to accept a pay cut sufficient to allow
every one to keep his or her job.

Redesign the entire sales force.

What advice would you give Michiko

Takanaga on how she should reduce her
department budgets?

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