Mercedes 1998 Annual Report Download - page 51

OTHER INDUSTRIAL BUSINESSES
47
3,891
4,906
885
892
1,081
1,072
Rail Systems*)
Revenues
Incoming Orders
Employees (12/31)
Automotive Electronics
Revenues
Incoming Orders
Employees (12/31)
MTU/Diesel Engines
Revenues
Incoming Orders
Employees (12/31)
98
US $
98
€
97
€
3,316
4,181
23,785
754
760
4,638
921
914
5,893
3,261
3,809
22,715
557
622
3,848
878
897
5,758
RAIL SYSTEMS. The rail systems business unit, which was still
being conducted by the Adtranz joint venture in 1998, in-
creased its sales by 2% to € 3.3 billion. Incoming orders also
increased to € 4.2 billion (1997: € 3.8 billion). This increase
resulted mainly from large contracts such as the order for 400
locomotives for the Deutsche Bahn AG, a complete city rail
system for the Portuguese city of Porto, diesel and electric
inter-city trains for England, streetcar lines for the French city
of Nantes, and various contracts for “People Movers.”
Adtranz recorded a significant loss in 1998 because in previous
years it had taken on contracts at prices that did not cover
costs and suffered from technical problems. We have
introduced comprehensive structural changes to increase
earning power in a sustained way. These changes especially
affect the plants in Germany and Scandinavia. Adtranz
proposed its new platform concept in 1998, which in the future
is intended to cover all product areas from People Movers,
streetcars, underground trains, regional and inter-city trains all
the way up to locomotives.
Adtranz was able to expand its market presence in Switzerland
through the acquisition of the Schweizerische Lokomotiv- und
Maschinenfabrik AG and the railroad division of Schindler AG.
We also have extended our international presence to Africa with
a joint venture for servicing and maintaining rail cars in Ugan-
da. As a result, Adtranz is now active in 60 countries, operating
under the aegis of proprietary companies.
In January 1999, we decided to acquire the 50% share in
Adtranz held by our joint venture partner ABB. On the one
hand this enables us to fulfill a contractual obligation and on
the other hand the complete takeover is in accordance with
our intention and interest to push ahead more quickly and
more purposefully with the restructuring of Adtranz in future.
AUTOMOTIVE ELECTRONICS. After the sale of the semicon-
ductor division, the automotive electronics (TEMIC) business
unit was able to increase its volume of business by 35% to €
0.8 billion and its incoming orders by 22% to € 0.8 billion, cal-
culated on a comparable basis, as well as create 790 new jobs.
In the meantime, TEMIC is concentrating upon its six product
areas — drives and chassis, antiblock brakes, passenger
protection systems, sensor systems, high-end electronic
equipment and electric motors, which function as autonomous
units. Among our customers are the companies of
DaimlerChrysler and all major automobile manufacturers.
TEMIC made 45% of its sales in 1998 with products that were
not older than two years. We invest about 10% of revenues in
research and development annually to ensure that we maintain
our capacity to innovate. An additional 9% is applied to invest-
ment in plant, property and equipment. In the case of new cars,
up to 90% of all technical innovations are today based on
electronics. This is the main reason driving an automobile is
becoming increasingly simple, safe, and comfortable. TEMIC
has thus introduced a series of trend-setting innovations in the
new S-Class: both axles are outfitted with pneumatic spring and
adaptive shock absorber systems (ADS), which have been
integrated as standard equipment in the AIRmatic (Adaptive In-
telligent Ridecontrol). Furthermore, the Distronic radar-based
electronic distance control system was incorporated into the
S-Class for the first time. TEMIC also supplies the control
systems for the multiple-position recliner, electronic ignition
switches, chassis sensors and radiator fan.
MTU/DIESEL ENGINES. For the MTU/Diesel Engine units 1998
was very succesful. Thanks to sales growth in Europe and
North America, we were able to increase revenues by 5% to
€ 0.9 billion despite the more difficult market conditions in
East and Southeast Asia. The overall expansion of business was
due to growth in the commercial sectors of the market. The
new 2000 and 4000 product lines received an especially warm
welcome from our customers. With the new engines, the
company is in a position to fulfill the demands of the market for
drive systems that are economical, easy to maintain and
optimized for efficient fuel consumption. Thanks to improve-
ments made to the MTU ship propulsion assemblies, MTU has
maintained a leading position in this segment of the market for
several years now. For this reason, MTU has for a long time
been offering complete financial arrangements for ships
through debis Financial Services. Increases in turnover were
also attained in locomotive engines.
We developed standardized units for the new 2000 and 4000
line of products for generating stationary electric power in
the “decentralized energy system” segment of the market.
These cost-efficient units bear the brand name “Virtus”. This
enables MTU to offer a range of outputs from 100 to 2000 kW.
Furthermore, we concluded a marketing and distribution
agreement with the gas turbine manufacturer AlliedSignal to
close the performance gap between large diesel engines and the
gas turbines of General Electric. Our subsidiary, L’Orange,
which is a manufacturer of high-performance injection systems
for diesel, heavy fuel and gas engines and the innovative
common rail system, continued its steady growth in 1998.
*) Of which 50% are included in the financial statements of the
DaimlerChrysler Group.
Amounts in Millions