Mercedes 1999 Annual Report Download - page 55

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OTHER INDUSTRIAL BUSINESSES
49
RAIL SYSTEMS: NEW STRUCTURE. Revenues at the Rail
Systems business unit were up 7% to €3.6 billion in 1999.
Earnings remained negative, however. The acquisition of the
50% share of Adtranz held by ABB is enabling DaimlerChrysler
to proceed more rapidly and effectively with the necessary
restructuring at Adtranz. In December 1999, Adtranz began a
comprehensive restructuring program that is expected to
achieve a turnaround at the rail systems company in 2000.
An important element of this program is targeted cost-cutting
achieved through the elimination of excess capacity, con-
centration on key areas of expertise and a more efficient
production and organizational structure.
The first CRUSARIS Intercity trains went into service in
Norway, Switzerland and Great Britain during the year under
review. Adtranz was responsible for 50% of the total contract
volume for the production of the ICE3 high-speed train, which
sets new technical standards in its segment. The People Mover
automated transport system from Adtranz also went into
operation at the Rome and Singapore airports. In China, the
business unit was involved in the electrification of a 600-mile
rail line. Adtranz also supplied subway and urban light rail
systems for Lisbon, Stockholm and Bucharest and several
cities in Germany.
AUTOMOTIVE ELECTRONICS: STILL BOOMING. The Auto-
motive Electronics business unit (TEMIC) is a leading sup-
plier of electronic systems for engines, safety systems and
applications that enhance driving comfort. TEMIC has
development, production and sales locations in strategic
markets in Europe, North America and Asia. Our customer
base includes most automobile manufacturers around the
world. Operations focus on seven areas: drivetrains and
chassis, ABS, occupant safety, sensor systems, comfort
electronics, electric motors and intelligent distance-control
systems. Each operates as an independent unit.
In 1999, the Automotive Electronics business unit posted an
18% increase in revenues to €0.9 billion. Incoming orders
jumped by 38% to €1.0 billion. The positive business outlook
at TEMIC led us to hire 535 employees.
New applications have been made possible by modern
automotive electronics. For example, TEMIC produces a
continuous velocity transmission (CVT), an adaptive cruise
control (ACC), telematics applications and systems that are
now controlled by electronics instead of hydraulics. We also
anticipate strong growth for our voice recognition system.
TEMIC took over this area from Dasa in 1999, making it the
world leader in voice control systems.
MTU/DIESEL ENGINES: TECHNOLOGICAL LEADERS. The MTU/
Diesel Engines business unit increased revenues to €1.0
billion in 1999 (1998: €0.9 billion). Revenues within
Europe climbed 8% to €600 million. Long-standing business
relations with our Asian partners also led to higher sales.
The increase resulted from the timely processing of defense
procurement orders already on the books, as well as growth
in the non-defense sector. The biggest contributors to
revenues in 1999 were sales of propulsion systems for large
high-speed ferries, luxury yachts, passenger ships and navy
ships. MTU/Diesel Engines’ new 2000 and 4000 Series
engines were augmented by additional cylinder and
application variants in 1999, setting new standards for
commercial markets in particular, and strengthening the
position of this business unit.
The launch of new product lines in the distributed power
systems segment also contributed substantially to the increase
in revenues. Alongside its traditional diesel engines and gas
turbines, MTU began supplying gas engines for distributed
power systems for the first time in 1999. The company drew
on its experience and expertise as a systems supplier in
developing the ready-to-install “Powerpack”— a complete drive
module for rail vehicles. In a development similar to trends in
the automotive industry, rail vehicle manufacturers are
increasingly turning to complete drive systems. MTU also
demonstrated its technological expertise through its subsidiary
L’Orange, which manufactures high-performance injection
systems for diesel, heavy fuel and gas engines and the innova-
tive common-rail systems.
Rail Systems*)
Revenues
Incoming Orders
Employees (Dec. 31)
Automotive Electronics
Revenues
Incoming Orders
Employees (Dec. 31)
MTU/Diesel Engines
Revenues
Incoming Orders
Employees (Dec. 31)
3,587 3,562 3,316
3,354 3,331 4,181
23,239 23,785
896 890 754
1,053 1,046 760
5,173 4,638
966 959 921
1,022 1,015 914
5,885 5,893
99
US $
99
€
98
€amounts in millions
*) 50% consolidation in 1998; comparable figures (100%)
shown in the table.