KUKA CEO negotiates with Chinese owner about replacement

KUKA CEO negotiates with Chinese owner about replacement

Supervisory Board chief Andy Gu and Reuter hold talks "about the premature termination of the Executive Committee", as the listed company announced in the night of Saturday.

Details were not provided. The Supervisory Board had not yet discussed it and decided, it said in a stock market mandatory release on "possible changes in the Board" only. Companies said that the Chinese wanted to be stronger in their day-to-day business. Reuter has been CEO of KUKA AG since 2009. His contract was extended in the spring of 2017 until the end of March 2022.

KUKA is one of the technologically leading manufacturers of robots for industry and was taken over by the Chinese home appliance manufacturer Midea in early 2017 after a long struggle. The case made headlines as Chinese companies invested heavily in German high-tech companies. Politicians in Brussels and Berlin had opposed that cutting-edge technologies fall into Chinese hands.

The Federal Ministry of Economics said on Sunday about the latest development: "We do not comment on staff speculation." Initially, no comments were received from IG Metall.

Companies said the Chinese wanted to drive integration and extend control to KUKA's operations. The owners wanted to enforce their ideas and take over the leadership. Midea holds nearly 95 percent of KUKA's shares, according to the company.

Most recently, the Augsburg-based company, with its 13,710 employees, after a long period of growth, lowered its forecast for the year due to gloomy prospects. Uncertainties in the Chinese automation market would be added to a worse development in the business with cars, KUKA had communicated with submission of the quarterly figures at the end of October.

For 2018, sales of around 3.3 billion euros are expected instead of the previously targeted revenues of more than 3.5 billion euros. CEO Reuter had announced that he would react "to the aggravated economic conditions" and put a "stronger focus" on the efficiency program.

Prior to the final takeover, KUKA and the Chinese had signed an agreement at the end of June 2016, which will bind Midea to far-reaching commitments by the end of 2023. According to the then statement, this includes location and employment guarantees, a commitment to KUKA's strategy and the independence of the Management Board. It also covered agreements to protect business partner data and the commitment not to seek a domination agreement and to allow stock exchange listing.

KUKA boss Reuter said at the time to the shielding and investor agreement, the agreed term of 7.5 years go far beyond the usual level. "It protects the interests of our company, our business partners, our employees and our shareholders well into the next decade." / Sl / DP / he

BERLIN / AUGSBURG (dpa-AFX)

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Image sources: TOBIAS BLACK / AFP / Getty Images, KUKA Systems

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