House Cleaning Bilfinger Taps Cost Cutter as CEO

Bilfinger, a struggling engineering and construction company, is poised to appoint a Norwegian manager with a track record of cost-cutting, Per Utnegaard, as its new CEO.
Bilfinger needs serious fixing.

Bilfinger, Germany's second-largest engineering and construction company, is poised to tap a Norwegian airport executive after a months-long search for someone to turn around the builder, which lost €71 million, or $80 million, in 2014.

As Handelsblatt reported earlier this month, Bilfinger’s chairman of the board and former Daimler executive Eckhard Cordes has chosen Per Utnegaard, who has been chief executive of airport services company Swissport International since 2007.

Mr. Utnegaard previously held senior management roles at Germany’s postal service Deutsche Post and at a rival courier TNT.

Bilfinger has not officially confirmed the choice.

But who is the man behind the colossal task to succeed Roland Koch, the former premier of the state of Hessen?

Mr. Utnegaard, 55, was schooled in the United States.

“Like any Scandinavian, Mr. Utnegaard is friendly, accessible and culturally sensitive,” said an industry source.

But behind the friendly demeanor is a disciplined and driven personality. "He is an extremely goal-oriented and decisive doer," said the source.

Mr. Utnegaard also knows the private equity business, which could become significant as Bilfinger looks to restructure and potentially downsize.

The Norwegian manager is well-versed in the services industry and knows how to build a global company. At Swissport, Mr. Utnegaard built a reputation for being reliable and focusing on customer service.

At Bilfinger, which is based in Mannheim, Mr. Utnegaard must satisfy Bilfinger’s main investor, Cevian, which owns 25.62% of the company.

“It will be Mr. Utnegaard’s task to fulfill the expectations of the owners of the company,” said Rene Zurin, a manager at Swiss company VPOD, an association of public service employees.

Mr. Utnegaard may be the right man to cut costs at Bilfinger.

He has a track record of cost-cutting but is politically pragmatic.

Recently, when 400 Swissport employees went on strike at Geneva’s international airport after Mr. Utnegaard threatened to lower their salaries, the Norwegian boss relented. The Swissport employees kept their salaries but got the message that cost cutting had arrived at Swissport too.

Bilfinger has struggled mostly with its energy and industrial services parts.

He will succeed Mr. Koch, a German and prominent member of German Chancellor Angela Merkel's Christian Democrat party, who failed to generate profits and resigned last August after Bilfinger issued two profit warnings.

Bilfinger has struggled with its energy and industrial services operations.

The company has sought a new strategy and last Tuesday announced plans to exit the offshore wind foundation business and sell its operations.

In 2014, Bilfinger, which employs 70,000 people worldwide, issued four profit warnings. Investors are looking to Mr. Utnegaard for a bit of good news for a change.

 

This story originally appeared in Wirtschaftswoche. To contact the author: [email protected]