Schaeffler Replaces CEO Geissinger to Overhaul StrategyDorothee Tschampa
Schaeffler AG replaced Juergen Geissinger as chief executive officer to shift strategy after plans to combine with car-component maker Continental AG failed.
Chief Financial Officer Klaus Rosenfeld will assume Geissinger’s role on an interim basis, the Herzogenaurach, Germany-based company said today in a statement. Geissinger’s departure is immediate and by “mutual consent,” it said.
“With today’s change of leadership we have paved the way for the future reorientation of Schaeffler Group and its leadership,” Chairman Georg F. W. Schaeffler said in the statement. “We thank Dr. Geissinger for his work and contribution to the success of our company.”
Geissinger has led the manufacturer of automotive, aerospace and industrial roller bearings since 1998. His contract would have expired at the end of 2014. Family-owned Schaeffler, which is burdened with debt from becoming the largest shareholder in Continental, is exploring an initial public offering next year, people familiar with the matter said in April.
The leadership change “could reflect the preparation for a potential IPO to de-leverage further,” said David Arnold, an automotive specialist at Barclays Plc’s investment-banking unit in London, said in an e-mail to clients today.
Geissinger came under pressure after spearheading a hostile takeover bid for Hanover, Germany-based Continental in late 2008. The offer, made just before global financial markets collapsed, was accepted by more investors than Schaeffler expected, almost leading to the company’s collapse as debt ballooned to about 12 billion euros ($16.3 billion).
The bearing manufacturer didn’t split with Geissinger in a dispute, Georg Schaeffler said on a conference call with journalists. Rosenfeld has “the full trust” of the whole supervisory board, the chairman said. He declined to comment on when the company is targeting the appointment of a new CEO. Rosenfeld is taking on the top post in addition to his responsibilities as CFO.
A decision on Geissinger’s future at Schaeffler had been set for the end of 2013, and his departure now was propelled by “targeted indiscretion in the press, for which we are not responsible,” the chairman and Maria-Elisabeth Schaeffler, his mother and the manufacturer’s co-owner, said in a letter to employees.
A plan by Schaeffler to name Klaus Deller from Munich-based brakemaker Knorr-Bremse AG as CEO was hindered by his current employer, Handelsblatt business daily reported earlier today. Georg Schaeffler declined on the conference call to comment on “personnel speculation.”
Deller is head of commercial-vehicle systems at Knorr-Bremse, a family-owned company with sales of 4.3 billion euros in 2012 and more than 19,000 employees.
Knorr-Bremse Supervisory Board Chairman Heinz Hermann Thiele “hasn’t talked to Schaeffler about the topic,” Eva Seifert, a spokeswoman at the brake producer, said by phone. She reiterated that Deller’s contract runs through April 2015.
Rosenfeld, a former Dresdner Bank CFO, was hired in 2009 to help Schaeffler reduce debt. The figure was cut to about 9 billion euros last month after Schaeffler earned 950 million euros in proceeds from selling a 3.9 percent stake in Continental, Europe’s second-biggest car-parts maker and the region’s No. 2 tire producer.
Schaeffler has reduced its holding in Continental to 46 percent from direct and indirect control of more than 90 percent of the stock. Schaeffler has also sold bonds to help refinance loans from the 2009 deal.
In addition to the possible IPO, another option to raise cash would be to bring in a large investor as owner alongside the Schaeffler family, one of the people familiar with the situation said in April.
Schaeffler lowered its 2013 sales forecast in August because of weaker demand at the industrial division. Revenue is expected to increase by 1 percent to 2 percent this year, slower than a previous forecast of 4 percent growth. The company maintained a target of earning 13 percent of sales before interest and taxes.