Danfoss Group Global - Page 3

Leader Putting Core & Clear into action By President and CEO Niels B. Christiansen By the time you read these lines, 200 Danfoss managers will have attended the GMM meeting in Florida, USA. GMM stands for Global Management Meeting and at this gettogether the overall strategy for Danfoss’ development was outlined. It is always interesting to listen to managers from all over the world to find out how Danfoss is progressing in their respective fields. We have been used to getting positive feedback at these meetings, with record net sales figures, company acquisitions and a number of new factories and offices being opened in practically every part of the world. This year the meeting had special importance. The issues that were up for discussion represented the biggest changes that have been implemented at Danfoss for many years – they may even have been unprecedented since the company was created three-quarters of a century ago. The managers worked hard from early morning until late in the evening, and now they have headed home you will see that Danfoss will be change quickly over the next few months. Indeed, part of the transformation has already taken place. We now have a simplified organisation, including five divisions that reflect Danfoss’ core businesses – areas that represent our strong world market positions. They are also five areas that have huge potential with regard to climate-friendly and energy-efficient products. We are now going to analyse all these products to check whether it is possible to have spare parts manufactured outside Danfoss that will result in improved quality and lower prices. We must find buyers or partners for those areas that others would be able to run more efficiently than us, and we must concentrate on only producing those products that the customers want to buy. The operation is now launched and its code words are Core & Clear. Over time we have built a very complex structure in Danfoss and this needs to be changed. No doubt some of the changes are going to hurt. We are going to have to break with many of our old habits but we simply do not have a choice. The crisis has been hard on a lot of companies, but because of our complex structure, it has particularly impacted us. The reefs will become visible once the water level drops and our journey will become extra dangerous if we do not change course. As reflected in the financial figures of the third quarter of 2009, we are witnessing the positive effects of the dramatic initiatives carried out during the year. And with the coherent Core & Clear strategy, committed to by the 200 managers attending the GMM meeting, we will be able to reach our targets. Danfoss will shrink for a while but in five years we will be just as big as we would otherwise have been. Together we will be going through a fantastically exciting period. Please read about the strategy in this magazine and on Danfoss’ new Intranet. If you have comments, you are always welcome to discuss them with your manager – or me. 3

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