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Video: Schaeffler Wants To Strengthen The Industrial Sector
Based on the still weak economic market conditions and the unsatisfactory result of the Industry division in the first nine months of 2016, the Management Board of Schaeffler AG has decided to step up the efficiency measures to revitalize the Industry division.
First cost-cutting measures largely implemented
After the "Core" program has largely implemented the first cost-cutting measures with a focus on Germany, additional measures are also to be implemented that also affect regions outside of Germany and functional areas that are not directly assigned to the Industry division. The aim of the measures is to streamline the structures in the industrial business, reduce manufacturing and administrative costs and thus sustainably improve the result of the entire industrial division.
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To this end, Schaeffler wants to consolidate the plant structures in the regions of Europe and the Americas and cut jobs in the industry-related administrative areas. Overall, the company expects to cut around 500 jobs. This is intended to improve the division's earnings by around EUR 60 million over the next three years. The company has initiated a dialogue with the relevant employee representatives. The amount of the provisions required for the restructuring has not yet been determined.
New products should utilize existing capacities
At the same time, with the core program, Schaeffler is pushing ahead with measures that are intended to bring the industrial division back on a growth path despite the currently difficult market conditions. This includes, among other things, product strategies to utilize existing capacities with new and cost-optimized products. Dr. Stefan Spindler, Member of the Board of Schaeffler AG and CEO of the Industry division: “We have set ourselves the goal of improving the EBIT margin of the Industry division to 10% to 11% by 2018. We can only do that if we optimize our costs in stable market conditions, better utilize the available capacities and at the same time push our sales efforts.”
The Industry division currently employs around 6,700 people in direct and indirect areas. In addition to seven plants that are directly assigned to the Industry division, the Industry division is supplied from a total of 36 plants in the Bearing & Components Technologies division. As an internal supplier, the Bearing & Components Technologies division bundles a large part of the rolling bearing production of the Schaeffler Group and supplies both the automotive division and the industrial division with rolling bearing products. In addition, the majority of the services and support tasks that the Industry division uses are provided by units that are not directly assigned to the Industry division.
Klaus Rosenfeld, CEO of Schaeffler, says: “The Industry division is an integral part of the Schaeffler Group's business model and our 'Mobility for tomorrow' strategy. We will do everything we can to put the division back on a sustainable path to success.” (kj)
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