Lohr , 2015-07-28

Bosch Rexroth to secure the future of its Mobile Applications business unit

  • Increasing competitive pressure due to falling demand
  • Cost cutting program of EUR 450m by end of 2018 planned
  • Dialog with employee representatives

Lohr, Germany – Bosch Rexroth is securing the long-term viability of its Mobile Applications business unit. For this purpose, the company plans a cost cutting program totaling 450 million euros. At several German locations, efficiency is to be improved, costs reduced, and structures made more lean. Describing the situation faced by the unit, Dr. Karl Tragl, the president of Bosch Rexroth AG, says: “Competition in the market for mobile applications is tough. Global overcapacity is resulting in considerable cost pressure across the industry. In addition, market demand has been slowing significantly.” For years now, the global markets for construction machinery and drilling rigs have been falling steeply. Recently, this development has also spread to agricultural machinery. The situation has been made worse by the sharp decline in demand in China, when the construction machinery market has recently dropped by some 40 percent. And while the European and North American markets for construction machinery and built-on accessories for on-highway and commercial vehicles are stable, they are not growing. In addition, market developments can be expected to be subdued for some time to come, especially in Europe.

The difficult market situation has made competition significantly tougher. “Our customers appreciate our technologically innovative products, but despite this we have to come to terms with this stiffer competition. If we want to maintain and further extend our leading position over the long term, we have to significantly reduce our costs,” Tragl says.

New growth stimuli

Apart from rapid, major cost cuts, Bosch Rexroth also intends to create new stimuli for growth. For this purpose, its sales structures are to be reorganized, with the aim of providing even better support for the various customer groups, as well as for the dealer business. For this purpose, Bosch Rexroth plans to extend its key account management for major international customers and to employ more sales associates there. In addition, support for regional customers is to be intensified. One way of doing this is through closer collaboration with sales partners. The service business is to be expanded. With replacement products and repair services, it promises to be a source of profitable growth. The company also plans to invest more heavily in the development of new products, especially to meet the requirements of various regions. In addition, further growth opportunities are opening up as a result of the constantly increasing electronification in vehicles such as excavators, forklifts, and tractors.

Talks with employee representatives

Effective immediately, Bosch Rexroth wants to conduct dialog with the employee representatives. It will present all the details of its overall concept for verifying and discussion, as well as to develop alternatives. The objective is to determine a common approach to close the cost gap derived from benchmarks. Product costs, the cost of materials, and personnel costs will have to be considered.

The focus will be on German locations in Augsfeld, Elchingen, Homburg, Horb, Lohr, and Schwieberdingen locations. The measures will affect all areas – administration, sales, development, service, and production. Among other things, work processes are to simplified, manufacturing operations consolidated and restructured, and organization streamlined. The company wants to avoid redundancies. However, a headcount reduction cannot be ruled out. This is also an issue that is to be discussed with the employee representatives. Bosch Rexroth’s aim is to find solutions that are fair and socially acceptable.

“We are aware of our responsibility for our associates and our business. We will carefully examine the next steps, taking as much time as is necessary. In acting this way, we are involving the employee representatives much earlier than required by labor law. In this case, we want to work together to find a new way forward,” Tragl says. “Adopting the right measures now will give us a chance to grow again in the years ahead, gain market share and increase our sales.”

Following the dialog, Bosch Rexroth will decide and implement the respective measures. The dialog will last several weeks.

In its Mobile Applications product area, Bosch Rexroth manufactures products such as transmission units, compact hydraulics, mobile controls, and pumps and motors. These products are used in mobile machinery around the world, for example on construction sites, in agriculture, or when extracting raw materials.

Economical, precise, safe, and energy efficient: drive and control technology from Bosch Rexroth moves machines and systems of any size. The company bundles global application experience in the market segments of Mobile Applications, Machinery Applications and Engineering, Factory Automation, and Renewable Energies to develop innovative components as well as tailored system solutions and services. Bosch Rexroth offers its customers hydraulics, electric drives and controls, gear technology, and linear motion and assembly technology all from one source. With locations in over 80 countries, more than 33,700 associates generated sales revenue of approximately 5.6 billion euros in 2014.

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The Bosch Group is a leading global supplier of technology and services. It employs roughly 360,000 associates worldwide (as per April 1, 2015). The company generated sales of 49 billion euros in 2014.* Its operations are divided into four business sectors: Mobility Solutions, Industrial Technology, Consumer Goods, and Energy and Building Technology. The Bosch Group comprises Robert Bosch GmbH and its roughly 440 subsidiary and regional companies in some 60 countries. Including its sales and service partners, Bosch is represented in roughly 150 countries. This worldwide development, manufacturing, and sales network is the foundation for further growth. In 2014, Bosch applied for some 4,600 patents worldwide. The Bosch Group’s strategic objective is to create solutions for a connected life. Bosch improves quality of life worldwide with products and services that are innovative and spark enthusiasm. In short, Bosch creates technology that is “Invented for life.”

Additional information is available online at , , .

*The sales figure disclosed for 2014 does not include the former joint ventures BSH Bosch und Siemens Hausgeräte GmbH (now BSH Hausgeräte GmbH) and ZF Lenksysteme GmbH (now Robert Bosch Automotive Steering GmbH), which have since been taken over completely.


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