Pricing pressure leaves marks
Coburg (9 December 2005). The ongoing pricing and cost pressure in the international supplier industry is leaving its mark in the Brose Group, too. Although the Group's turnover rose in 2005 by 10% to 2.2 billion euros due to the increased system business, the automotive supplier anticipates a decrease in result due to a drop in product price and the advance payments required for expanding worldwide production capacities.
The individual business areas have developed differently in the course of 2005. The greatest growth is registered in door systems which has increased by 29% to 800 million euros in 2005. The seat adjuster business has increased to 405 million euros (+19%). In window regulators, turnover has dropped to 805 million euros (-2%) due to substitution by door systems. The closure system business has decreased, as anticipated, to 190 million euros. Beginning in 2007, however, a clear increase in turnover is expected in this area.
The turnover generated abroad rose in 2005 by 24% to 1.2 billion euros. In Germany, turnover dropped by 3% to around 1 billion euros.
The greatest increase has been generated by door systems and seat adjusters for DaimlerChrysler and Ford in the NAFTA region and Europe.
Geared to growth
To achieve further growth, Brose is still pursuing its strategy of performance leadership. "We want to be able to offer an optimal price-performance ratio on a permanent basis and not just to be the cheapest in the short run. That's why we would rather turn down an order than renounce our corporate principles of quality, innovative capability and long-term economic stability," said Jürgen Otto, who will assume the post of CEO on 1 January 2006, during the press conference.
Brose invested almost 9% of its turnover in the development of new products and processes, information technology and personnel development. In the future, similarly high expenditure will be made aimed at securing the company's future, ensuring that Brose maintains the highest level of productivity in order to save costs and to ensure the quality of the products.
Global presence extended
In keeping with the growth strategy, around 160 million euros were invested in new products and the establishment of new locations in Europe, Canada and China in 2005. In Herrenberg/Germany, a just-in-sequence plant began manufacturing door systems for DaimlerChrysler and in London/Canada, a new factory launched production of door systems and seat adjusters for Chrysler and Ford. In China, the third production facility, which will manufacture seat adjusters, window regulators and door systems, is nearly completed.
More employees worldwide
The number of employees in the Brose Group increased by 690 (+8.5%) in 2005 to 8,840 employees. The headcount in Germany of approx. 4,630 remained constant, with a declining number of employees in production areas.
The company aims to retain the capacities achieved in German production and administration areas though permanent improvements of cost pools as long as possible. “Together with our works councils, we want to fight to keep the jobs in our German plants. To do this, however, we also need our customers’ support,” said Michael Stoschek on Friday in Munich.
Location Germany
As Michael Stoschek clarified at the press conference, Brose began preparing for increased pricing pressure early on. At the German locations in particular, numerous actions have been taken over the past eight years to increase competitiveness in production and administration in order to remain on the cutting edge with regard to quality, work organization and technology. In addition to applying state-of-the-art production and communications technology, measures were introduced as early as 1998 including flexible weekly working time for production employees, the declaration of Saturday as a regular work day and the elimination of overtime premiums. The introduction of the “New Brose Organizational Model” in 2001 also allowed the company to increase efficiency in engineering and administration while cutting costs: Brose transformed the time-related pay system into a result-oriented system, and ceased to record and pay overtime for staff with negotiated salaries.
Forecast
With the expected decrease in demand for passenger cars in Europe and the NAFTA region and further reduction of vehicle prices, Brose again only projects growth of 4% outside of Germany in 2006. The number of employees abroad will also increase.
An improved result situation is not anticipated due to the advance payments for new production facilities in Germany and Sweden: in 2006, plants in Holzgerlingen and in Gothenburg will begin manufacturing door systems.
Press contact:
Gabi Rujoub
Telephone: +49 9561 21 1653
Telefax: +49 9561 21 1704
E-mail: gabi.rujoub@brose.net
The individual business areas have developed differently in the course of 2005. The greatest growth is registered in door systems which has increased by 29% to 800 million euros in 2005. The seat adjuster business has increased to 405 million euros (+19%). In window regulators, turnover has dropped to 805 million euros (-2%) due to substitution by door systems. The closure system business has decreased, as anticipated, to 190 million euros. Beginning in 2007, however, a clear increase in turnover is expected in this area.
The turnover generated abroad rose in 2005 by 24% to 1.2 billion euros. In Germany, turnover dropped by 3% to around 1 billion euros.
The greatest increase has been generated by door systems and seat adjusters for DaimlerChrysler and Ford in the NAFTA region and Europe.
Geared to growth
To achieve further growth, Brose is still pursuing its strategy of performance leadership. "We want to be able to offer an optimal price-performance ratio on a permanent basis and not just to be the cheapest in the short run. That's why we would rather turn down an order than renounce our corporate principles of quality, innovative capability and long-term economic stability," said Jürgen Otto, who will assume the post of CEO on 1 January 2006, during the press conference.
Brose invested almost 9% of its turnover in the development of new products and processes, information technology and personnel development. In the future, similarly high expenditure will be made aimed at securing the company's future, ensuring that Brose maintains the highest level of productivity in order to save costs and to ensure the quality of the products.
Global presence extended
In keeping with the growth strategy, around 160 million euros were invested in new products and the establishment of new locations in Europe, Canada and China in 2005. In Herrenberg/Germany, a just-in-sequence plant began manufacturing door systems for DaimlerChrysler and in London/Canada, a new factory launched production of door systems and seat adjusters for Chrysler and Ford. In China, the third production facility, which will manufacture seat adjusters, window regulators and door systems, is nearly completed.
More employees worldwide
The number of employees in the Brose Group increased by 690 (+8.5%) in 2005 to 8,840 employees. The headcount in Germany of approx. 4,630 remained constant, with a declining number of employees in production areas.
The company aims to retain the capacities achieved in German production and administration areas though permanent improvements of cost pools as long as possible. “Together with our works councils, we want to fight to keep the jobs in our German plants. To do this, however, we also need our customers’ support,” said Michael Stoschek on Friday in Munich.
Location Germany
As Michael Stoschek clarified at the press conference, Brose began preparing for increased pricing pressure early on. At the German locations in particular, numerous actions have been taken over the past eight years to increase competitiveness in production and administration in order to remain on the cutting edge with regard to quality, work organization and technology. In addition to applying state-of-the-art production and communications technology, measures were introduced as early as 1998 including flexible weekly working time for production employees, the declaration of Saturday as a regular work day and the elimination of overtime premiums. The introduction of the “New Brose Organizational Model” in 2001 also allowed the company to increase efficiency in engineering and administration while cutting costs: Brose transformed the time-related pay system into a result-oriented system, and ceased to record and pay overtime for staff with negotiated salaries.
Forecast
With the expected decrease in demand for passenger cars in Europe and the NAFTA region and further reduction of vehicle prices, Brose again only projects growth of 4% outside of Germany in 2006. The number of employees abroad will also increase.
An improved result situation is not anticipated due to the advance payments for new production facilities in Germany and Sweden: in 2006, plants in Holzgerlingen and in Gothenburg will begin manufacturing door systems.
Press contact:
Gabi Rujoub
Telephone: +49 9561 21 1653
Telefax: +49 9561 21 1704
E-mail: gabi.rujoub@brose.net
