DAIMLER-BENZ Aerospace (DASA) is to renew its attack on loss-making areas of the business, threatening further tough decisions this year after running up huge losses in 1995 as the company moved to rationalise its activities.
Several events during the year combined to worsen the figures, which left DASA with a substantial net loss of DM4.18 billion ($2.8 billion), compared with losses of DM438 million in 1994. Overall, the Daimler-Benz Group lost DM5.7 billion. The low US dollar value, the high costs associated with a restructuring programme and losses from the collapse of Fokker are all blamed by DASA.
The German company declines to give details, of the new measures to restore profitability, but there is wide speculation that aero-engine maker MTU will be merged with rival BMW Rolls-Royce. DASA has already said that it will sell a majority stake in aircraft-maker Dornier.
The net loss contains extraordinary charges of DM2.3 billion, to cover the manufacturer's withdrawal from its stake in Fokker, - which later led to the Dutch manufacturer's bankruptcy.
Expenditure on restructuring cost DM 0.9 billion, two-thirds of which related to efforts to improve competitiveness. Employee numbers fell by 5,000 to 50,000 and there is the prospect of further losses this year. Sales edged up to DM15.03 billion.
The decline in the value of the dollar depressed the operating loss of DM2.69 billion by DM400 million and made it necessary to increase order backlog-risk provisions by DM800 billion. "Our overriding goal is to return to sustained competitiveness and profitability", says DASA president Manfred Bischoff. He adds, that the target is to return to the black by 1998.
Source: Flight International
