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Oerlikon chief in shock exit

The publication of Limberger's salary in Oerlikon's 2006 annual report caused a public outcry

(Keystone)

Thomas Limberger, chief executive of Swiss technology group OC Oerlikon, has left the company less than two years after taking on the role.

Limberger courted controversy earlier this year when details of his SFr26 million ($21.4 million) remuneration package were revealed. He subsequently handed back 40,000 options to reduce his compensation to SFr7.7 million.

He was appointed CEO months after the company, formerly known as Unaxis, was bought out by Austrian investment group Victory in 2005, ending an acrimonious takeover battle.

Limberger stepped down with immediate effect on Monday night and will be replaced by former chief operational officer Uwe Krüger.

"This was his own decision, taken freely and in agreement with the board of directors," the company said in a statement.

The statement went on to add that Limberger would continue his association with the company as a consultant.

Limberger has been linked with a new job at Geneva-based SGS, a company that checks that goods traded across borders meet various regulatory requirements. However, SGS have denied that he will join the firm.

Restructuring

Although Oerlikon remains one of Switzerland's technological heavyweights, the company has suffered in recent years from a combination of alleged management problems, difficult market conditions and what many analysts see as the lack of a clear strategy.

In March however Oerlikon reported a net profit of SFr302 million for 2006, its best performance in six years.

The takeover of engineering company Saurer and an ongoing restructuring programme boosted results at the company, which made a net profit of SFr21 million in 2005.

Despite this success, rumours had been circulating recently about a split between Limberger and board members, but the timing of his departure has come as a surprise.

"The point in time was a surprise but not his actual departure. He had denied in a recent official statement that he was preparing to leave," Julius Bär analyst Bruno Winiger told swissinfo.

Limberger was trying to emulate the success of his previous company, General Electric, according to Winiger. And his method was to add new companies to the group, such as machinery manufacturers Saurer last September.

"Limberger was following the strategy of copying the General Electric business model into OC Oerlikon - he wanted to grow OC Oerlikon into a GE Europe," Winiger said.

"He followed this plan with a number of acquisitions and it might be that the pace of such acquisitions will now slow down. However, I would not expect any immediate change of strategy but only time will tell."

Sulzer speculation

New CEO Krüger will have to work with majority shareholders Victory and Russian billionaire Viktor Vekselberg, who also has a large stake through his investment company Renova.

The two parties have been causing jitters in Switzerland by swallowing up manufacturing companies in the past two years.

Last month they announced the capture of nearly a third of shares in engineering giant Sulzer, catching the company by surprise and leading to speculation of a merger with Oerlikon. However, Winiger does not think such a move would make much business sense.

"There are not many synergies between Oerlikon and Sulzer, they are in very different fields, so there does not appear to me much sense in a merger," he said.

swissinfo, Matthew Allen with agencies

In brief

Oerlikon's high-tech applications can be found in cars, satellites, machines, textile products, solar panels, MP3 players and beamers.

In 2006, Oerlikon invested SFr60 million in research and development. Including Saurer, there are more than 1,500 researchers, developers and engineers working for the group.

OC – which stands for "One Company" - Oerlikon has had a number of name changes over the years. Before its present name, it was called Unaxis. Previously it was Oerlikon-Bührle.

The group is the world leader in coating solutions and textile machinery, and is number two in the area of vacuum technology.

As an example, 70% of the global production of CDs and CD-ROMs is manufactured on the company's equipment.

end of infobox

Key facts

OC Oerlikon 2006 financial figures:
Sales: SFr2.291 billion (SFr1.605 billion in 2005).
Operating profit: SFr329 million (SFr34).
Net profit: SFr302 million (SFr21 million).
Number of employees at the end of December: 19,267 (6,434).

end of infobox


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