Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from John Inch – Merrill Lynch.
John Inch – Merrill Lynch
I wanted to start out with some of the incremental structuring and the thoughts there. ADT Ed and you're up 4.2% margins. That's pretty weak, and understanding the economy is soft there, but I thought we had taken a ton of action in Europe already. Could you describe as you look out, what it is that you think you could be doing more to address the current economy and sort of what you think the timing is? Do you still ascribe to margins in ADT over time approaching 10% or is something structurally changed there do you think?
Edward Breen
First of all, overall during this quarter we're now in, part of the restructuring we're doing is taking out some variable overhead costs in the businesses. As you saw, most of our declines we're seeing are on the commercial side of the business so we have to readjust our work load level, and that is happening during this quarter.
It takes us kind of a quarter to quarter and a half to get that incremental cost out of the system so you really didn't see that out yet, but it'll start to have some benefit in the third quarter for us. And a little bit this quarter, but specifically with Europe, I think it's the most exaggerated example of what we're seeing.
Europe is almost totally a commercial business with very little residential business as you know. The mix is very skewed there and that's where we're seeing the most softness with our orders being down 7% to 8%. So there's where we really have to do an adjustment of our cost. Again, it takes a little longer in Europe as you know because of the union situations in certain countries, but we will be bleeding that out mostly over this quarter and a little bit into the third quarter.
Eventually we should be able to get these margins up around 10% in Europe. There's nothing structurally different there that we can't get there once we stop seeing the softness in the marketplace. We're north of 10% in every other region in the world. This is the only one and it's because of the commercial softness.
Christopher Coughlin
Just to highlight, it's the one place where we saw a chase in the revenue decline and you can't take the actions. And again, this is a people intensive business in terms of the installation, and so it's working with the workers councils and getting all those things approved so we can take the actions that are required, which is why it's also so difficult to estimate the exact timing of when those restructuring charges will take place by quarter.
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