Former BMW product development boss Wolfgang Ziebart is expected to keep Infineon firmly grounded in the automotive sector when he takes over as CEO later this year, reports SupplierBusiness.com.
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The auto industry is a key customer for the Munich-based microelectronics firm. It is No. 2 in the segment globally behind Motorola.
CEO Ulrich Schumacher left Infineon in March after a management board disagreement that has never been fully explained by the company. Insiders say it was at least partly due to Schumacher’s abrasive style.
Ziebart is currently deputy chairman of German tyre and automotive systems supplier Continental AG. He will join Infineon by 1 September 2004, replacing acting CEO Max-Dietrich Kley.
Infineon pulled off a major coup in landing Ziebart. Some German industry watchers expected him to return to an OEM after his career hit a roadblock at Continental AG. His name was even mentioned in connection with the current shake-up at Mercedes-Benz.
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By GlobalDataThe 54-year-old ex-BMW star has been lauded for his performance at Continental Automotive Systems. But he is only two years younger than Continental CEO Manfred Wennemer.
Still, sales and profit growth at Continental Automotive Systems has been a key driver for sales and profits growth at Continental group during the last two years. The EBIT (earnings before interest and tax) margin at Automotive Systems rose from 6.8% in 2002 to 8.0% in 2003. In the first quarter of 2004 EBIT increased 40.7% to 9.2% of sales. Continental’s share price has risen 130% in the last 12 months.
A more thoughtful style
Ziebart will bring a more reflective and unobtrusive style to Infineon – although he is no stranger to boardroom disagreements.
He survived the tumult surrounding the exit of Stephan Kessel as CEO of Continental in September 2001, despite his close association with Kessel’s strategy of focusing on growing the Automotive Systems business. He left BMW’s board, along with current Opel boss, Carl-Peter Forster, over disagreements with then BMW Chairman Joachim Milberg over the company’s strategy for Rover Group.
German unions reportedly withheld their vote in favour of Ziebart at the Infineon supervisory board meeting because of fears over his association with Continental’s successful outsourcing strategy.
Outsourcing has been an essential part of Conti’s turnaround, particularly in the Continental Tire and ContiTech rubber-metals businesses. But Ziebart’s focus has been much more on technology, products and processes within Automotive Systems.
Ziebart is likely to keep Infineon firmly in the automotive sector. He is a former manager of BMW’s in-house electronics systems development and was the program manager for the BMW 3 Series.
Improvement at Infineon
Infineon has been lifted by the uptick in semiconductor demand in the last year. The company reported an EBIT loss of €299m in the fiscal year that ended 30 September 2003(compared with an EBIT loss of €1.1bn in 2002).
Infineon reported an EBIT profit of €141m in the first half of fiscal 2004, ended 31 March.
Automotive and industrial revenue accounted for 23% of 2003’s €7.2bn in sales. Sales in the sector rose 5% in the second quarter “despite ongoing pricing pressure” the company said. Infineon expects further revenue growth in the segment for the rest of 2004.
