Klaus Rosenfeld
“We want to avoid redundancies due to operating conditions.”
The industry is weakening, margins continue to crumble: the SchaefflerCorporation wants to accelerate its transformation with a new corporate program, In doing so, five plants in Europe will be put to the disposition. In addition, investments should be geared even more towards the age of electric mobility. In an interview with Handelsblatt, CEO Klaus Rosenfeld explains his plans.
Mr. Rosenfeld, the automotive division of SchaefflerGroup is facing a conversion. What exactly is planned? We need to accelerate, especially with regard to the future of electrification and digitization. At the same time, we can not and do not want to give up the classic field of combustion engines. This is only possible if we brake and accelerate at the same time. For this we started the program RACE. RACE is not just a cost-cutting program, it’s about optimizing our portfolio. Existing business is put to the test to free up money for new tasks. This also includes possible acquisitions. There is already a lot in the pipeline.
This also includes a further change in management? Yes, that’s right. We set up the leadership team for the future at the beginning of the year. After all, the year 2018 has shown that we have to adjust to even more headwinds and that market conditions worldwide are becoming more difficult. In other words, the leadership team must be composed in such a way that it can meet the challenges of the future. We are now getting an Indian and an American board member. That alone shows how we need to change. We are getting younger. We are becoming more international. English becomes the corporate language and we get an even more global view of things. That’s something special for a company like Schaeffler.
What do you expect for your industry of automotive suppliers? I assume that we will see a bipartition among the suppliers: there will be those companies that manage to keep up with change. And then there is a second part: companies that do not have the necessary balance sheet and cash flow to actively shape change. It will be difficult for these suppliers. Of course, we at Schaeffler want to be part of the first group.
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So how will you continue? We will focus even more in the future and accelerate our transformation. To do that, we need to prioritize more and focus on those businesses that are truly promising. And not on what you probably will not need in ten years.
Auto parts supplier: Schaeffler increases conversion speed and wants to delete 900 jobs
Give us concrete examples: What will Schaeffler no longer need in the future Components for manual transmissions are one such concrete example. In internal combustion engine drives, the direction clearly goes to the automatic. So it is a logical consequence that we consider withdrawing from this business. Worldwide, the manual transmission is in free fall. Even in the combustion world, there is no real innovation potential left.
China has been a particular concern for you over the past year? There is a significant difference between China and China Germany, We were able to react flexibly to the market weakness in China locally. That means there, if necessary, one also approaches the employment figures. In Germany and Europe, experience has shown that this is more complicated. So we faced a problem when production volumes in Europe dwindled noticeably. No one expected in the middle of the year that business would go down so much. Now we have to ask ourselves: what are we doing in our European network?
Where do you want to start now? We have come to the conclusion that we need to think deeply about our positioning in Europe. This is especially true for smaller sites with about 200 employees. According to our current plans, five European sites are expected to be put to the test. We have to admit that in the past we were not always consistent enough. All these considerations are agreed with our employee representatives. For us, the main question is how and in what way we proceed.
Are there any changes to the Schaeffler structure? Schaeffler has been very centrally controlled in the past. Today we think divisional and decentralized. And more entrepreneurial. Therefore, I am optimistic that we will be successful with the upcoming restructuring of our automotive sector.
Let’s go back to the five locations that are threatened with closure. So about 1000 jobs will be deleted. Will that be all?
We will first explore all other ways to get jobs. For example through sale or relocation. This is also part of the future agreement we made with our employee representatives. We also have to stay flexible in every direction: maybe the market will develop positively again and the four million cars that are now missing in the global market will come back again.
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Will you look at your production network outside Europe? For example, in China or in the US No, focusing is primarily a European topic. We will not deal with that in China and America.
How much would a reduction in jobs hit German plants? If we implement all measures as planned, we are talking about 900 fewer jobs. Of these, about 700 are attributable to Germany. We want to avoid operating layoffs. Of course, we also look at the administrative areas and it is not just about dismantling. We will continue to build on strategically important future fields.
With a chance of success? I think so. In the new business areas of the future, we will achieve an order volume of 1.5 to two billion euros per year in the coming years. Part of such a prognosis is courage. But we are convinced that we can do it.
The automotive world around you is changing. You want to react to that. That’s essentially what’s happening at Schaeffler?
That’s the point. The second half of 2018 was not just a wake-up call for us. When we had the weak November numbers in the books, it was clear to us: we have to respond. Therefore, there is now the program RACE. With three phases. With the first phase, we want to improve the result of our Automotive OEM division by around 90 million euros.
And a second wave? That may be a topic in the coming year. With larger portfolio considerations up to further acquisitions. That would then also be associated with further strategic considerations and depends on market and technology development. So it’s not just about focus, it’s about flexibility.
Mr Rosenfeld, thank you very much for this interview.
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