Eckhard Cordes has seen his share of trouble as a senior executive. As chairman of Bilfinger since 2014, he has overseen a company on a perilous downward slide.
The construction giant has been in deep water for more than half a decade, and is shrinking so rapidly the term “giant” may not apply for much longer. Four years ago, the company was aspiring to global turnover of €12 billion, or $13.3 billion. It is currently at around one-third of that level, and falling fast.
Yesterday, the Mannheim-based company released first quarter-figures revealing an 8 percent drop in revenues, and yet another operating loss, highlighting the urgency of its plans to downsize and restructure.
The strategy, masterminded by chief executive Tom Blades, appointed a year ago, will see Bilfinger focus its operations and cut its workforce in half, in a bid to come back a leaner, more defined operation. Mr. Blades hopes for a return to profitability in 2018.
In a frank interview with Handelsblatt, Mr. Cordes, said he felt duty-bound to take over in the Bilfinger boardroom when asked by Cevian, the investment company of which he is a partner. Cevian is Bilfinger’s largest shareholder, with over 25 percent of its stock.
Mr. Cordes insisted Bilfinger had already moved from crisis to stabilization: “I am very optimistic: we’ve removed the complexity from the business, focusing on two business sectors, four regions, and six customer industries,” he said. In future, Bilfinger will concentrate on its core strengths of construction and engineering services, radically cutting its subsidiaries, from 600 to just 160.
Bilfinger has had a poor record of hiring choices in recent years.
The 67-year-old former Daimler executive said that Cevian was patient with Bilfinger’s chronic problems. The investment company was “oriented to the long-term with its investments,” he said.
He also emphasized the limits of his own position at Bilfinger, saying his main task was to find outstanding managers to shepherd the company to a brighter future. “My partners at Cevian understand what a chair can and can’t do under German law. The board has to find the right people and then help guide strategy,” he said.
Bilfinger has had a poor record of hiring choices in recent years. From 2010 to 2014, it was run by Roland Koch, a prominent former politician, whose tenure is widely seen as a failure. There were high hopes for his successor, Per Utnegaard, but the former pharmaceuticals executive was forced out within a year. “Utnegaard underestimated the complexity of our operations. He never really got off on the right foot – he was aware of that himself. So eventually we had to fill the position again,” Mr. Cordes said.
Mr. Cordes is no stranger to troubled times. His executive career has been punctuated with well-publicized fall-outs and walk-outs. At Daimler, where he ran the prestigious Mercedes cars division, he left the company after Dieter Zetsche became CEO. “There wasn’t room for two bulls in the field,” he told Handelsblatt, but insisted it was his decision to leave.
From that frying pan, Mr. Cordes leapt into the fire, taking over at Haniel, one of Germany’s largest family-owned groups, where for a time he served both as chief executive of the overall group and of one of its major components, retail conglomerate Metro Group. Mr. Cordes eventually gave up overall control of the group to concentrate on Metro, but butted heads with Jürgen Kluge, his successor as Haniel CEO. “So I acted consistently and after a while decided it was better to call it quits,” he told Handelsblatt.
In 2010, Mr. Cordes became managing director of the Committee on Eastern European Economic Relations, which promotes German economic ties with Eastern Europe and Russia. His position was made difficult by the outbreak of war in the Ukraine in 2014, followed by economic sanctions against Russia, whch were supported by the German government, but opposed by many business leaders.
Unsurprisingly, given his ups and downs, Mr. Cordes takes a philosophical outlook. He said he tells his four sons not to define themselves by their role or title. “The guy in the mirror in the morning – that’s who you are, not the CEO or the vice president.”
Tanja Kewes is Handelsblatt's chief reporter and author of the column "The Human Factor." Peter Brors is Handelsblatt's deputy editor in chief, based in Düsseldorf. To contact the authors: [email protected], [email protected]