Schaeffler AG steps up measures to improve efficiency in industrial business
As a result of a continued weak economic market environment and of the unsatisfactory business results achieved by the Industrial division in the first nine months of 2016, the Board of Managing Directors of Schaeffler AG has decided to step-up efficiency improvement measures in order to revitalize its Industrial business.
Having completed most of the cost reduction measures of the first wave of program CORE with a focus on Germany, a second wave of measures is being initiated which will also cover the regions outside of Germany as well as functional areas not directly part of the Industrial division.
The target of the additional measures is to further implement leaner structures in the Industrial business, reduce production and administrative costs, and sustainably improve the financial results of the Industrial division.
It is planned to consolidate the plant capacities in the regions Europe and Americas and to reduce the workforce in Industrial business related administrative areas. As part of the second wave, we expect to reduce approximately 500 jobs in total.
The proposed measures are expected to result in a sustainable improvement of the division’s financial result by approximately EUR 60 million over the next three years. Consultations with relevant employees’ representatives have been initiated. The amount of required provisions has not yet been determined.
In parallel, program CORE’s measures, designed to deliver sales growth despite the current difficult market conditions, are being stepped up. These measures include, among others, product strategies to fill underutilized production capacities with new and cost-optimized products. “Our goal is to improve the EBIT margin of the Industrial division to 10 to 11 per cent by 2018. This can only be accomplished if we continue to reduce our costs given stable market conditions, better utilize existing production capacities and increase our sales efforts,” says Dr. Stefan Spindler, Member of the Managing Board of Directors of Schaeffler AG and CEO Industrial.
The Industrial Division currently employs approx. 6.700 people in the direct and indirect areas. In addition to seven factories dedicated to the division, there are 36 Bearing & Components Technologies factories acting as internal suppliers to the Industrial business. The Bearing & Components Technologies unit bundles the majority of the roller bearing production in the Schaeffler Group and supplies both the Automotive as well as the Industrial division with bearing products. In addition, a major portion of services and support tasks used by the division are being provided by internal departments not directly part of the Industrial Division.
Mr. Klaus Rosenfeld, Chief Executive Officer of Schaeffler AG, says in this context: “The Industrial division is an integral part of the Schaeffler Group’s business model and of our strategy ‘Mobility for tomorrow.’ We will focus all our efforts to set the Industrial division back on a sustainable course for success.”
About Schaeffler AG
The Schaeffler Group is a leading global integrated automotive and industrial supplier. The Schaeffler Group produces high-precision components and systems in engine, transmission, and chassis applications as well as rolling and plain bearing solutions for a large number of industrial applications. The technology company generated sales of approximately EUR 13.2 billion in 2015. With around 85,000 employees, Schaeffler is one of the world’s largest family companies and, with approximately 170 locations in over 50 countries, has a worldwide network of manufacturing locations, research and development facilities, and sales companies.
For more information, visit www.schaeffler.us.