FRANKFURT (Reuters) - German automotive supplier Grammer AG (GMMG.DE: Quote, Profile, Research, Stock Buzz) could sell or spin off its rail seat operations within a year if cost cuts there don't bear fruit, Chief Executive Rolf-Dieter Kempis told Reuters on Tuesday.
"We do not have more than 12 months," he said at the Reuters Autos Summit in Frankfurt.
Its rail seat business -- with annual sales of around 40 million euros or 4 percent of group turnover -- has suffered as Alstom (ALSO.PA: Quote, Profile, Research, Stock Buzz) and Siemens (SIEGn.DE: Quote, Profile, Research, Stock Buzz) have pushed price cuts and demand has slackened, he said.
He was ready to review all options including a merger or finding a joint venture partner.
Grammer also intends to cut staffing levels at its core automotive business by 10 percent.
"We must be more productive and leaner in the way we run this business," he said.
Kempis, a former supervisory board member who got a two-year contract as CEO to whip the company into shape, said an earlier campaign to save 15 million euros in costs was not ambitious enough and he now aimed to double the target to 30 million.
Half of the savings would come from reducing headcount.
He forecast the European auto sector would see flat sales and more pressure on suppliers to cut prices next year. Continued...
© Thomson Reuters 2008. All rights reserved.
| Paper | Aug 20 - 21, 2008 | Manufacturing |
| Japan Investment | Jul 01 - 2, 2008 | Country Summits |
| Global Real Estate | Jun 23 - 25, 2008 | Real Estate |
| Consumer and Retail | Jun 16 - 18, 2008 | Consumer Retail |
| Investment Outlook | Jun 09 - 12, 2008 | Financial Services / Exchanges |
