The board of directors of the American Standard Cos. announced Feb. 1 it has approved a plan to separate its three businesses in 2007, and ultimately sell its kitchen and bath business.

The board of directors of the American Standard Cos. announced Feb. 1 it has approved a plan to separate its three businesses in 2007, and ultimately sell its kitchen and bath business.

The company will retain its air-conditioning systems and services business (2006 sales of $6.8 billion), and change the name to its flagship brand Trane. Also, it will spin-off its vehicle control systems (2006 sales of $2.0 billion) as an independent, publicly traded company called WABCO.

American Standard unanimously made the decision to sell its bath and kitchen business, which had lower earnings last year even with 2006 sales of $2.4 billion.

“The board has concluded that separating American Standard into three focused, better understood companies will create greater shareowner value than the current structure,” said Chairman and CEO Fred Poses in a company statement.

During 2006, about 54 percent of bath and kitchen’s sales came from Europe, 38 percent from the Americas, and 8 percent from Asia-Pacific. The business has about 26,000 employees and 54 production facilities around the world.

“As part of our initiatives to rebuild Bath and Kitchen’s profitability, we have announced plans to consolidate manufacturing operations and sales functions in Europe. These plans will result in the elimination of about 210-250 jobs,” Poses said.

The sales process for the company’s bath and kitchen business is expected to begin this month. Proceeds from the sale are expected to reduce the liabilities of the remaining company (Trane) and to repurchase Trane’s common stock.

The company expects to complete both the spinoff of WABCO and the sale of bath and kitchen by early fall of this year.

Trane’s headquarters will remain in Piscataway, N.J., and the company will continue to trade on the NYSE using a new stock symbol to be announced later. WABCO will be a U.S. company, with executive and administrative offices in Brussels, Belgium and Piscataway. It is also expected to be listed on the NYSE.

PMEngineer will post more breaking news as it happens, and follow-up with industry reaction in its next issue.