MAN Energy Solutions Launches Program for the Future
July 23, 2020
The executive board of MAN Energy Solutions is launching a comprehensive
program to ensure the future viability of the company. Extensive cost-cutting and
restructuring measures are the necessary next steps on the way to the company’s
transformation into a solutions provider for sustainable energy supply. In addition,
the company is preparing for a prolonged period of stagnant sales as a result of the
Covid-19 pandemic.
To achieve this, the company plans to cut its costs by 450 million euros and
increase its operational flexibility, among other objectives. The aim is to achieve an
operating margin of 9% and improve the company’s cash and liquidity position by
2023, even taking the global economic impact of COVID-19 into account.
Adapting and optimizing the production network with a focus on core value creation
and greater flexibility is a key component of the program. In this context, the
company intends to halt steam turbine production in Hamburg and is also
considering closing the production facility in Berlin and relocating production
currently conducted there to another site.
The program will also focus on reducing the cost of materials and equipment,
optimizing the service network, streamlining the product range, cutting costs within
the group functions, and focusing research and development on next-generation
technologies.
“We need to prepare ourselves for a market environment that will remain difficult
for a long period of time,” said Dr. Uwe Lauber, CEO of MAN Energy Solutions.
“Some of the company’s key areas of business, such as the cruise ship business,
have been directly affected by the economic impact of the COVID-19 pandemic
and we do not expect to see a recovery to precrisis levels until 2023. The program
is designed to address these negative market influences and make lasting
improvements to MAN Energy Solutions’ ability to respond to market fluctuations.
We have already begun to combat negative market influences in recent years and,
as a result of the measures we have introduced, we have achieved and even
exceeded our revenue targets. In terms of earnings, however, we haven’t yet
reached our goal. Therefore, increasing our profitability and improving our
competitive ability are key to continue successfully implementing our strategy for
the future.”
MAN Energy Solutions announced its new strategy in 2018, which describes the
company’s transformation from a component supplier to provider of sustainable
energy solutions. These new solutions are expected to account for 50% of its
business by 2030.
Augsburg, July 22, 2020
Strong Focus on Fast Implementation
The executive board expects that the implementation of the program will result in
the elimination of up to 3,000 positions in Germany and 950 abroad. This reduction
in the workforce will be carried out in a socially responsible manner as far as
possible, although compulsory redundancies cannot be completely ruled out.
The executive board has initiated talks with the works council regarding the
program and the associated effects on employees. “In the light of the effects the
Covid-19 pandemic has on our target markets, we must act fast”, says Martin
Rosik, Board Member responsible for Human Resources at MAN Energy Solutions.
“The company and the employee representatives are therefore negotiating under
great pressure. Our focus is on structural improvement and on reaching the cost
down target. We will negotiate the feasible options to get there with the employee
representatives in a very timely manner.”
MAN Energy Solutions is paving the way to a carbon-neutral global economy. Whether industrial
production, the energy industry, or the maritime sector, we think holistically and are tackling the
challenges of tomorrow today – so our customers can create value in a sustainable manner. Our
technology portfolio contains the experience gained with a more than 250-year-old tradition of
engineering. MAN Energy Solutions is based in Germany and employs approximately 14,000 people at
over 120 locations worldwide. Furthermore, our customers benefit from the global service-center
network offered by MAN PrimeServ, our brand for after-sales service.