Vancouver-based Ballard Power Systems plans to reduce its cash consumption, restructure its organization and lay off about 28% of its employees over the next 12 months as part of a five-year plan to develop the next generation fuel cell engine.

In the reorganization, Ballard will combine three of its four divisions — transportation, power generation and electric drives and power conversion — into a single, “functional” organization to enable the company to accelerate development of its core technologies and reduce administrative expenses. Ballard’s Material Products Division will continue to operate as a stand-alone division, and the company will keep its offices in Burnaby, Canada; Dearborn, MI; Lowell, MA; and Nabern, Germany.

Overall, 400 positions will be eliminated. About 250 workforce reductions will be done mostly through attrition, transfers and layoffs. About 100 will be redeployed from Germany to DaimlerChysler, one of Ballard’s major investors in fuel cell and alternative powertrain development. The remaining reductions will affect all functional areas of Ballard’s global operations except the Material Products Division.

Over the next 12 months, Ballard intends to reduce employment by an additional 150 positions. These reductions will result from the centralization of transportation system design in Germany, following the completion of the heavy-duty bus program in Vancouver, and the restructuring of Ballard’s fuel processing business.

“Our strategy and five-year plan have been reformulated with an emphasis on sustainability, speed and execution,” said COO Dennis Campbell. “The revised plan provides Ballard with the financial resources into 2007 to advance our current and anticipated commercialization plans, along with a significant concentration on technology research and product development necessary to ensure our success. Ballard expects to achieve profitability by the end of the plan period.”

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