Lohr am Main, 2015-11-03

Bosch Rexroth starts measures to turn its Mobile Applications business unit around

  • Secure future viability and return to growth
  • Wide raft of measures to cut costs
  • Consultants engaged by employee representatives verify turnaround concept
  • Up to 1,150 jobs to be shed by end of 2018
  • Negotiations about reconciliation of interests and social compensation plan now underway
  • Growth through innovation and new distribution channels

Lohr, Germany – At the end of July, Bosch Rexroth announced cost cuts in its Mobile Applications business unit. Since then, the company has been conducting talks with the employee representatives and their consultants in order to give them the opportunity to check the plausibility of the turnaround concept and propose alternative measures. The aim of the turnaround proposed by Bosch Rexroth is to cut costs by 450 million euros and in this way secure the unit’s long-term viability. In this regards, the company intends to reduce overcapacity, increase efficiency, and facilitate future growth. The consultants engaged by the employee representatives have now validated the concept. Bosch Rexroth is examining the employee representatives’ proposals in detail; its concept already takes many of them into account. The company is now starting its turnaround program, with employee representatives still free to propose alternative measures for the locations affected.

The cost-cutting package will mean that as many as 1,150 jobs will be shed at six German locations – Augsfeld, Elchingen, Homburg, Horb, Lohr, and Schwieberdingen – by the end of 2018. Jobs are to be cut in as socially compatible a way as possible, using severance packages and phased retirement schemes, as well as offering associates employment at other Bosch Group locations. Mapping out the next steps in the process, Dr. Karl Tragl, the president of Bosch Rexroth AG, says: “We can now start negotiations about the social compensation scheme and reconciliation of interests. Our goal is to avoid redundancies.” The negotiations will also include talks with the respective employee representatives about measures for each of the locations. Tragl stressed that management is still open for any proposals the employee representatives may have for turning the respective locations around, especially if these proposals mean that fewer jobs need to be shed.

Simpler work processes and new products

To cut costs and turn the Mobile Applications business unit around, Bosch Rexroth has planned a wide raft of measures: simpler work processes will be introduced, and greater use made of lower-cost plants outside Germany. In addition, manufacturing processes will be made more flexible to allow Bosch Rexroth to react better to ever greater fluctuations in demand. Distribution processes are also to be made more flexible so that the company can react faster to customer requirements. At the same time, the company plans to invest in the development of new products.

Falling demand and overcapacity make cost cuts necessary

Bosch Rexroth is a leading supplier of mobile applications for excavators, wheeled loaders, forklifts, tractors, and combine harvesters. Worldwide, demand has been declining for some years, with the companies that manufacture these vehicles reducing capacity, relocating to lower-cost countries, and even closing down plants completely. To compound this situation, sales of construction machinery in China have fallen even further, and were down more than 40 percent year on year in the first half of 2015.

At meetings held at the end of July at the six locations affected, the company informed associates of the need for cost cuts amounting to 450 million euros, made up of reductions in product costs, cost of materials, and personnel expenses. In the months since then, the turnaround concept has been the subject of talks with the employee representatives and their consultants.

“In the long-term view, the target markets for mobile applications are still attractive. For the time being, however, we have to react to structural changes in our markets in order to make the business unit fit for the future and return to a growth path,” Tragl says, summing up the combination of cost cuts, investment in new products, and realignment of distribution structures.

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). In 2014, it generated sales of 49 billion euros. 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 goal is to deliver innovations for 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.”

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*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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Judith Mühlich
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