IBM Deutschland GmbH yesterday announced plans for a campaign on six fronts to stem eroding profits and position itself better for the future. In the first quarter, the weakness in our industry continued to affect us, president Hans-Olaf Henkel said on Wednesday. The order inflow situation appears to have become more difficult, adding that relentless downward price pressure was still weighing on its hardware business, though the profitable and growing software and services lines have been developing better than planned. The German subsidiary’s plan involves reorganising the corporate structure, slashing jobs and operating costs, broadening partnerships, remaining a leading hardware supplier, boosting productivity and quality, and substantially expanding the software and services lines in the wake of a 32% drop in net profits at the subsidiary for 1991 at $291, even though turnover rose 11% to $9,104m. The turnover gains were in large part attributable to the company’s expansion into the newly opened eastern German market, as well as to strong advances by the non-hardware lines. But the post-unification economic boom in Germany is petering out, so that growth will slow.Henkel said that concepts under study include creating a German holding company and giving individual business lines a more independent profile. The company currently employs around 30,000 people and shed 1,000 last year, all by attrition; a similar number is planned to go this year.
