Chatting with Markus Forschner: A Peek into Bosch's Plans for 2026 Amidst Economic Challenges
Expanding Business Horizons: Bosch Continues to Thrive
Bosch, the tech giant, is set to trim around 13,000 jobs, with about 8,600 coming from the Mobility segment. A significant portion of these cuts will be in Germany, where Bosch employs approximately 130,000 of its 435,000 workers.
Mr. Forschner, shedding some light on the layoffs, mentions economic downturn and structural reasons like the slower pace of electromobility adoption as the primary causes. However, he emphasizes it's a fluid transition. In the Mobility sector, Bosch has grappled with particular segments such as automated driving and electromobility, expecting higher volumes but not seeing a significant increase in the near future.
Trade unions have voiced concerns about management's initial optimism, but Forschner defends the decision, saying it was based on industry-standard economic principles. With the current market conditions though, he admits adjustments are necessary.
Bosch, a colossal company with around 470 subsidiaries worldwide, nearly 430,000 employees, and over 90 billion euros in annual sales, consistently needs to adapt even in periods of economic boom. Despite the job cuts in Germany, Forschner points out that Bosch has created tens of thousands of jobs over the years.
While the planned job cuts are set, Forschner doesn't rule out further adjustments as economic risks and geopolitical instability persist. The company remains confident in the long-term shift to electromobility but acknowledges that the transition isn't happening at the same pace globally, advocating for technology openness.
According to their forecast, Bosch's sales will remain relatively stable by 2024. The company aims to remain a growth-focused enterprise, with an average growth rate of 6 to 8% per year over the past few decades. The current economic turbulence doesn't seem to jeopardize this goal.
All four business segments are experiencing a market weakness, with some signs of improvement in the U.S. and China due to easing fiscal and monetary policies. Europe, however, is projected to face another tough year in 2024.
In 2025, Bosch anticipates a modest global vehicle production growth of maximum 1%. The operating profit margin before interest and taxes, adjusted for special effects, is expected to be less than 4% this year. The company aims to achieve a margin of 7% again in 2026, given that the core markets recover and its structural measures prove effective.
Bosch's free cash flow aims for 1% of sales. Despite the challenges in 2024, the company expects the free cash flow to at least balance out.
Bosch's acquisition of the heating, ventilation, and air conditioning global business from Johnson Controls for 8 billion dollars remains on schedule, with the deal expected to close in mid-2025. The headquarters for the new business has yet to be decided.
Forschner confirms that Bosch will finance the acquisition primarily with its own funds, but may use a mix of existing liquidity and debt for the financing. An IPO for the heating and air conditioning business is not off the table, but no concrete plans have been made. The company aims to be among the top three in every segment worldwide, considering mergers, joint ventures, or stock market spin-offs as potential strategies.
- Joachim Forschner, in his conversation about Bosch's plans for 2026, mentioned a lack of significant increase in electromobility volumes as a challenge in the Mobility sector.
- The automotive industry, including Bosch, is anticipating a moderate global vehicle production growth of only 1% in 2025, with an operating profit margin before interest and taxes (adjusted for special effects) expected to be less than 4%.
- Despite the economic downturn, Joachim Forschner, emphasizes that Bosch, in its efforts to adapt, has consistently created tens of thousands of jobs over the years.
- As Bosch's acquisition of the heating, ventilation, and air conditioning global business from Johnson Controls for 8 billion dollars approaches, Joachim Forschner confirmed that the company will primarily finance the deal with its own funds, but may also use a mix of existing liquidity and debt.
