6. November 2014

Linde Hydraulics initiates comprehensive reorganisation

Linde Hydraulics GmbH and Co. KG is responding to the challenges it is facing in its global sales markets by carrying out comprehensive reorganisation. The aim of the planned measures, which are designed to permanently reduce costs by up to €40 million a year once fully implemented, is to safeguard the long-term competitiveness of the premium technology company.

The programme is being introduced in response to far-reaching changes in the hydraulics industry. There has been a significant downturn in the international construction equipment market coupled with a sharp fall in global demand for hydraulics products.

Through the optimisation of structures and processes at its sites, Linde Hydraulics is also looking to be able to respond even more rapidly and more efficiently to the requirements of markets and customers. Meanwhile, improvements and additions to the product portfolio should make the company more competitive and open up new market opportunities. The company is also building on its partnership with its biggest shareholder, Weichai Power. Plans are in place for a joint venture in China that should further improve access to this critically important market.

“By taking these measures, we will further improve our speed and performance in the marketplace and lay the foundations for future growth, thereby securing our company’s long-term competitiveness,” says Dr Jörg Ulrich, Chief Executive Officer of Linde Hydraulics.

A large part of the planned cost savings relates to personnel, structure and sites. According to preliminary plans, up to 350 jobs may be affected by essential adjustments to capacity and structure. The company will commence talks with employee representatives and IG Metall trade union soon. The Linde Hydraulics and works council representatives will cooperate closely to examine all of the possible options. The objective is to work out a viable solution that is in the interests of the company and its employees and has the minimum possible social impact.

The two shareholders – Weichai Power and Linde Material Handling – are giving their full backing to the reorganisation of Linde Hydraulics and have secured the long-term funding for a comprehensive package of measures comprising further improvements and additions to the product portfolio, the construction of a new production plant, and structural efficiency enhancements. In doing so, they are underlining the company’s and promising prospects and strategic importance.

“We acquired a 70 per cent share in Linde Hydraulics in 2012, we are confident of the company’s potential for future growth in emerging markets such as China, and we will continue to give substantial support to help Linde Hydraulics on its path,” says Sun Shaojun, Executive President of Weichai Power. The CEO of Linde Material Handling, Theodor Maurer, says: “Linde Hydraulics is a highly regarded supplier of mobile hydraulics. Reorganisation will open up additional market opportunities for the company.”

The new hydraulics plant in Aschaffenburg will be built as planned. “The plant is a key part of the optimisation programme and will help to raise efficiency,” says Ulrich. Following the ground-breaking ceremony in September last year, the plant is expected to be completed by the end of 2016 at the latest.