04-Nov-2009 - Danfoss A/S

Danfoss changes its business structure

Greater focus on Danfoss’ core businesses and core competencies, and creating opportunities for more targeted development activities and less bureaucracy: these are the targets of the new business structure which Danfoss will implement with effect from January 1, 2010. The former three divisions will become five more targeted and flexible units, each reporting directly to Danfoss’ Chief Operations Officer, Kim Fausing.

The five new divisions are as follows:

Danfoss Refrigeration & Air Conditioning Controls, headed by Kjeld Stærk, divisional President.

Danfoss Commercial Compressors, headed by Leif Fløjgaard, divisional President.

Danfoss Heating Solutions, headed by Kim Christensen, divisional President.

Danfoss District Energy, headed by Lars Tveen, divisional President.

Danfoss Motion Controls, headed by Troels Petersen, divisional President.

”We aim to obtain a stronger customer focus through building close ties with the customers and, consequently, the highest possible degree of targeted development of innovative solutions. At the same time, we need to make sure that Danfoss is more flexible and easier to do business with. This is why we have decided to re-organise our business into five new divisions. At first sight, going from three to five could seem to be the opposite of the ideal way forward, but the philosophy is that, principally and thanks to the new structure, we will have a flat organisation since the new divisions will directly reflect the market areas within which we operate. Therefore, we will be able to avoid a great deal of internal coordination,” explains COO and Executive Vice President Kim Fausing.

The final structure of the new divisions will be completed during the remaining months of 2009 to become fully operational at the beginning of 2010.

”In combination with the change of the top management, which was carried out about four weeks ago, when Executive Vice President and CDO Nis Storgaard was given the responsibility of a number of business units set to undergo a restructuring and strategy clarification process, we now have in place an organisational and business structure which will support our core competencies and core strengths:

At Danfoss Refrigeration & Air Conditioning Controls, we will have the products and services that make Danfoss an absolute leader in the global market, when it comes to energy-efficient control and regulation of refrigeration and air-conditioning systems. Danfoss Commercial Compressors is set to concentrate on the targeted use of our global position as a number two within the development and supply of the most energy-efficient compressor solutions for the commercial refrigeration and air-conditioning market. Danfoss Heating Solutions will cover the solutions and products which, with the least possible energy consumption, ensure comfort and climate control in buildings, whereas Danfoss District Energy will be able to fully concentrate on expanding Danfoss’ position as the world’s leading supplier of components and part-solutions for district heating and district cooling. Thereby, we intend to speed up even more the further development of solutions for this area, which make up the most climate-friendly and efficient distribution of energy available in the world. At Danfoss Motion Controls, we continuously aim to strive for the absolute best options within transmission technical solutions, where our tradition within optimal energy-efficiency can be utilised even more. The division also includes Danfoss’ activities relating to solar energy and the wind turbine sector,” says Kim Fausing.

The reorganisation will result in the closing down of a range of corporate functions.

”It is still too early to say anything certain about how many leaders and salaried employees will be made redundant. This will be decided during the completion process which will take place over the next few months, but it is certain that a number of jobs will be lost,” says Kim Fausing, who expects most job cuts to take place through redeployment and voluntary agreements.

Sauer-Danfoss, a listed company headed by CEO and President Sven Ruder, is an independent company, but due to the Danfoss Group’s ownership of the controlling interest, Sauer-Danfoss’ development, production and sale of mobile hydraulics is, in principle, the sixth business area in the Danfoss Group. The changed business structure has no impact on Sauer-Danfoss.

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